ESG Report2022CONTENTS3 Our Purpose4 Statement from Ron OHanley6 A Letter from Rick Lacaille8 2022 at a Glance10 CLIENTS11 Asset Management12 Insights,engagement,and proxy voting14 Investment Servicing15 State Street Total ESG16 ESG research and thought leadership17 GOVERNANCE18 Stakeholder Engagement19 Materiality assessment19 History of ESG engagement21 Board Governance and ESG Management21 Board governance22 Policies and charters22 ESG management 22 Focus on climate risk at the Board level22 Recruitment for greater Board diversity24 Shareholder engagement24 Consolidated leadership forum25 Risk,Ethics,and Compliance25 Risk management 26 Navigating the shifting world of compliance26 Integrating ethical conduct into our culture27 Our Conduct Standards Committee27 Compliance training27 Human rights in our supply chain28 Operational and Cyber Resilience28 Operational resilience29 Cyber resilience31 Data Privacy31 Global data policy and compliance training33 SOCIAL34 Diversity,Equity,and Inclusion35 Black Equity at Work Certification36 10 Actions to Address Racism and Inequality 37 Equity in Action Month37 Disability and veteran inclusion 38 Diversity Inc.Top 5038 Gender equality40 Enhancing supplier diversity 41 Pay equity disclosure41 Civil Rights Audit42 Employee Experience43 Our culture43 Listening to our employees44 Bravo employee recognition44 Employee networks44 A culture that values learning and advancement45 Supporting employee health and well-being45 Flexible work46 Developing talent47 Internal mobility through our talent marketplace48 Corporate Citizenship49 State Street Foundation50 State Street Volunteers52 Corporate Balance Sheet Management52 Sustainability Bond53 Treasury ESG and funding strategies53 Tax-advantaged investments53 Global Credit Finance53 Leveraged loans54 Commercial real estate55 Municipal finance56 ENVIRONMENT57 Environmental Footprint58 Progress against our operational sustainability goals 58 Measuring our environmental impact59 Reducing our environmental footprint59 Maintaining carbon neutrality59 Reduced water consumption59 Reducing our waste59 Sustainable building design60 Task Force on Climate-related Financial Disclosures61 Governance62 Strategy62 Risk management77 Metrics and targets82 APPENDIX83 Sustainability Accounting Standards Board(SASB)Report84 Asset management and custody activities92 GRI Index113 U.N.Sustainable Development Goals116 EU Directive on Non-Financial Reporting118 EEO-1 Report120 U.N.Global Compact124 Assurance Letter126 State Street Worldwide 2HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTOUR PURP OSE IS CL E A R:To help create better outcomes for the worlds investors and the people they serve.As one of the worlds largest service providers and managers of institutional assets,our success depends on the success of our stakeholders our clients,employees,investors,and the communities we serve.We believe that considering environmental,social,and governance(ESG)issues supports our purpose.For more information,visit .3HOMESTATE STREET CORPORATION|2022 ESG REPORTCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTINTRODUCTION 3HOMESTATE STREET CORPORATION|2022 ESG REPORTWelcome to our 2022 Environmental,Social,and Governance(ESG)Report,which sets out State Streets approach to managing and measuring ESG considerations.2022 was an especially dynamic year in the ESG space,marked by several significant events,including Russias invasion of Ukraine in February,and the wars impact on fuel prices,transition finance planning,ESG ratings,and ESG-focused exclusionary investment screening.Asset managers responded to new and proposed regulation,including the EU Sustainable Finance Disclosure Regulation,the SECs proposed rule to require climate-related disclosures,and an increase in reporting expectations around climate and ESG risks,including the Corporate Sustainability Reporting Directive.During a year in which the topic of ESG spurred divided political and policymaker views,particularly in the U.S.,we maintained our commitment to ESG and remained consistent in our approach,which is underpinned by value.We believe that ESG supports State Streets purpose to help create better outcomes for the worlds investors and the people they serve.Through our service of global clients,we have acquired a broad understanding of how E,S,and G issues may affect investors and the value they derive from investments.State Street employs a three-pronged approach to ESG:1.As a corporation,we identify the ESG impacts we have as a company and are attentive to the effective management of those impacts.We aim to reduce our environmental impacts and manage climate-related risks for our business,and we carefully consider and manage our impact on employees,communities,and society.ESG oversight is underpinned by robust processes and controls,recognizing the interests of clients,employees,and shareholders.2.As an investment manager,we believe that incorporating ESG factors into our investment risk framework can have STATEMENT FROM RON OHANLEY RONALD P.OHANLEYChairman and CEOINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT 4HOMESTATE STREET CORPORATION|2022 ESG REPORTa positive impact on long-term value creation.This belief influences our engagement and stewardship activity,our development of investment choices for our clients,and the design of our investment processes.3.As an investment servicer,we support our clients in their ESG activities,enabling them to be effective in their management of ESG opportunities and regulatory requirements through the provision of timely reporting research,data,and analytics.In 2022,we continued to progress our corporate ESG agenda through the launch of our inaugural Sustainability Bond framework and issuance of our first Sustainability Bond,the proceeds of which will be exclusively allocated to projects with positive environmental impacts and/or positive social outcomes aligned to one or more of the U.N.Sustainable Development Goals.State Street Global Advisors,our investment management business,extended proxy voting choice to more index fund investors,which will enable those investors to direct how shares they hold in index funds are voted.We advanced the goals of our 10 Actions to Address Racism and Inequality,and have conducted an independent civil rights audit,the results of which will be announced in the second quarter of 2023.And,we continued to take a leadership role with global organizations that include:the Council for Inclusive Capitalism,a group of global leaders doing business in ways that benefit people,their communities,and the planet;FCLTGlobal,which focuses capital on the long term to support a sustainable and prosperous economy;and the Sustainable Markets Initiative,launched by the then-Prince,now King Charles III of the United Kingdom at the World Economic Forum in 2020 to provide recommendations to world leaders to accelerate the energy transition to a more sustainable future,which last year introduced a transition finance framework.Consistent with prior reporting,State Street discloses our activities according to the Sustainability Accounting Standards Board(SASB),the Task Force on Climate-related Financial Disclosures(TCFD),and the Global Reporting Initiative(GRI)frameworks.This report also fulfills State Streets obligations under the EU Non-Financial Reporting Directive and as a signatory to the United Nations(U.N.)Global Compact,and describes how our ESG-related activities support progress toward U.N.Sustainable Development Goals.Given that the political polarization around ESG does not look to abate any time soon,where do we go from here?We believe that ESG need not be a divisive issue.Rather,we view it as an evaluation and assessment of long-term risk for investors and the associated implications for companies and policymakers.It is a more comprehensive view of value creation and risk mitigation.We will serve and operate as a responsible corporate citizen,which includes considering ESG factors as a lens for long-term decision-making and carefully managing the impacts we have on colleagues,communities,the environment,and society.Along with our peers,we seek to manage the regulatory,client,shareholder,and wider stakeholder interests around ESG issues,and we are working on behalf of our clients to bring greater coherence to competing standards and frameworks.As ESG considerations evolve,we will continue to partner with clients and work alongside our peers and regulators,broader stakeholder audiences,and the communities in which we live and work to navigate this changing landscape and the complexities that regulations and market dynamics may bring.State Street is well positioned to help clients address this complex set of issues while creating value for its stakeholders and shareholders.INSERT DIGITAL SIGNATURER O N A L D P.O H A N L E YChairman and CEOR O N A L D P.O H A N L E YChairman and CEO 5HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTTo our valued stakeholders:State Street has three principal ways in which it delivers impact to its stakeholders.One way is through its business operations,including its physical footprint and consequent environmental and social impacts.Another way is through products and services we offer products that can help our clients achieve their sustainability goals.The third way that State Street delivers impact is as a large-scale institutional investor on behalf of a global client base with a significant ownership stake in thousands of portfolio companies.We believe that carefully managing our own ESG impacts can create long-term value for our key stakeholders.Furthermore,by providing our clients with insight and choice in their management of environmental,social,and governance factors,we enhance the quality of our service.Our status as a global systemically important bank,the nature of our business operations,and our role as an investor create a complex array of impacts.In order to gauge how we can be most effective and deliver value for our key stakeholders clients,investors,employees,and communities we conduct a biannual materiality assessment.In this report,the use of the term“materiality”and other similar terms is intended to reflect matters that we judge to be of most significance to our key stakeholders in terms of impact or creating long-term value.We are not using such terms as they are used under the securities or other laws of the United States or any other jurisdiction,or as these terms are used in the context of financial statements and financial reporting.Through the materiality assessment and analysis,we identify these ESG topics,which are shared with our Board of Directors,and they inform our ESG strategy,approach,and reporting.We conducted our last assessment in 2021,which resulted in eight focus areas for our ESG strategy.RICK LACAILLEExecutive Vice President and Global Head of ESGA LETTER FROM RICK LACAILLE INTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT 6HOMESTATE STREET CORPORATION|2022 ESG REPORTWe believe that carefully managing our own ESGimpacts can create long-term value for our key stakeholders clients,investors,employees,and the communities where weoperate.We look forward to conducting our next assessment this year,where we will review a number of inputs from multiple reporting frameworks and benchmarking exercises,as well as feedback gathered from stakeholder surveys,interviews,and shareholder engagement.Looking back over 2022,many of our clients faced significant new regulatory demands,particularly with the introduction of the Sustainable Finance Disclosure Regulation in Europe,requiring transparency on portfolio composition.We provided clients with insight and comprehensive data about their portfolios,enabling them to go beyond compliance with the regulation and improve their ability to communicate clearly with their clients.We also responded to proposals regarding mandatory ESG disclosure from both the Securities and Exchange Commission in the United States and the Financial Conduct Authority in the United Kingdom,among others,offering our perspectives on effective climate-related financial disclosures for the benefit of investors.Given these developments,we consider the establishment of the International Sustainability Standards Board(ISSB)and publication of two Exposure Drafts,including the IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and Exposure Draft IFRS S2 Climate-related Disclosures,to be a crucially important development.As regulations continue to evolve and new regulations emerge,helping our clients adapt and stay ahead of these requirements will be an important priority.Our global client base gives us insight not only into how ESG issues affect investors,but also the disparate environments in which our clients operate and the competing objectives they seek to manage.Often,meeting our clients needs means providing a range of options from which they can choose according to their particular goals,constraints,and other imperatives.In our investment products,that includes strategies with a specific ESG focus as well as others that employ ESG criteria in their research processes.Given the scale and global reach of our business,managing our own environmental impacts is relevant to all our stakeholders.We are committed to a high standard for global environmental stewardship and as a result have set goals and targets to help reduce our environmental impacts.We continue to make progress toward our operational sustainability goal targets for carbon reduction and water consumption reduction.In 2022,we maintained carbon neutrality on Scope1 and Scope2 emissions through the purchase of renewable energy certificates and carbon offsets.Externally,we are an engaged 7HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT2 All data as of December 31,2022,unless otherwise noted.Environmental goals are against 2019 baseline.3 Metric tons of carbon dioxide equivalent.4 For Scope1 and 2,based on independently reviewed data and resultant investment in renewable energy credits and carbon offset projects.5 State Street maintains ISO 14001 Environmental Management certification in 18 global offices.ISO is the International Organization for Standardization and ISO 14001 sets out the criteria for an environmental management system and can be certified to.It maps out a framework that a company or organization can follow to set up an effective environmental management system.6 Diverse syndicates include veteran,Black,Latinx,and women-owned firms.$3.8B senior debt issued includes$500M bond issuance under the Sustainability Bond framework.1 Launched by the former Prince of Wales,at the World Economic Forum 2020 Annual Meeting in Davos,the Sustainable Markets Initiatives mission is to build a coordinated global effort to enable the private sector to accelerate the transition to a sustainable future.2022 AT A GL A NCEESG SNAPSHOT2ENVIRONMENTAL25rbon emissions reduction(Goal:27.5%by 2030)40%water reduction(Goal:25%by 2030)1,754 mt3annual carbon savings from 2022 projects100rbon neutrality418ISO 14001 sites5SOCIAL$3.8Bsenior debt issued in 2022 using diverse syndicates6$20.2Mtotal giving by State Street Foundation145,222“Bravo”program employee recognition moments recorded$141Mspend in supplier diversity program 95,494hours volunteered by employeesGOVERNANCE30male Board members23%racially diverse Board members92%independent Board members$500Mbond issuance under Sustainability Bond Framework7new independent directors added since 2017 industry voice,and our participation with the Sustainable Market Initiative1 enables us to bring clients together in a dialogue to share actionable ideas for facilitating the transition to a low-carbon economy,and to enhance the sustainability of the environment on which we depend.Over the past year we made important progress on internal initiatives and achieved higher levels of engagement within our company.For example,we have over 100 employee network chapters worldwide.Among the largest are the Professional Womens Network,whose goal is to elevate and empower female employees throughout our organization,and the Environmental Sustainability Employee Network,which has branches across the globe to share ideas and actions to support their local communities.Perhaps the most significant initiative is our 10 Actions to Address Racism and Inequality.It has had many impacts,going beyond a focus on human capital management to consider for example procurement practices and our role in the financial system,best exemplified by our successful fixed income issuance program underwritten by minority-owned brokers.8HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTsignatureR I C K L A C A I L L EExecutive Vice President and Global Head of ESGIn 2022,the definition,merits,and realm of ESG were continually challenged and debated.We believe that these stress factors and pressures even the expression of political perspectives about ESG provide an opportunity to affirm the validity of ESG as an important lens and consideration for decision-making,not only for clients,but also for our own operations as a responsible corporation.Sincerely,Another prominent accomplishment was the release of our inaugural Sustainability Bond Framework and issuance of our first Sustainability Bond.The proceeds received from the Sustainability Bond issuance will be exclusively allocated to projects with positive environmental impacts and/or positive social outcomes,that are aligned to one or more of the internationally recognized United Nations Sustainable Development Goals,thus underlining our commitment to operating responsibly as part of our corporate-wide ESG strategy.The achievement reflected cross-functional collaboration across the firm and was the product of a yearlong effort.As a preview of this report,in the following pages we detail State Streets approach to ESG aligned to four primary areas:Clients,Environment,Social,and Governance.Within these sections,we will cover our ESG strategy and our approach to measuring and managing our eight ESG material issues:climate change;employee experience;diversity,equity,and inclusion;board governance and ESG management;risk,ethics,and compliance;operational and cyber resilience;data privacy;and ESG integration,which encompasses how State Street defines and approaches ESG,and is a common thread throughout the report.In 2023,we are preparing for future regulatory reporting requirements that will impact our corporate reporting deliverables.We are also refining our internal governance structure and oversight of ESG issues and activities,in close partnership with our Risk,Legal,Finance,Compliance,and Marketing colleagues.In closing,our enterprise ESG strategy,and our goal to deliver long-term value for our key stakeholders,remains consistent despite the evolving external ESG landscape.Our foundational objectives with respect to E,S,and G likewise remain constant:Environmental:We aim to reduce environmental impacts from our business operations and manage climate-related risks for our business.Social:We carefully consider and manage our impact on employees,communities,and society.Governance:Our Board of Directors exercises independent oversight of all matters including those relating to environmental and social factors.R I C K L A C A I L L EExecutive Vice President and Global Head of ESG 9HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTCLIENTS11 ASSET MANAGEMENT 14 INVESTMENT SERVICING 10HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONAPPENDIXGOVERNANCESOCIALENVIRONMENTCLIENTSCLIENTSASSET MANAGEMENTState Street Global Advisors is the asset management business of State Street Corporation.Our ESG strategy and stewardship approach arise from our fiduciary duty to drive long-term value for our clients.To that end,we engage with companies and boards on long-term risks and opportunities,including ESG factors and issues.To pursue value for our clients,we encourage companies to assess,manage,mitigate,or capitalize on financially material risks and opportunities.In 2022,State Street Global Advisors centralized ESG governance by creating a senior level committee to oversee its ongoing commitments to ESG and sustainable investing,related business practices,and public policy matters relevant to thefirm,as well as to oversee the Asset Stewardship teams proxy voting and issuer engagements.We also issued our first Task Force on Climate-related Financial Disclosures(TCFD)report.Over the past year we set interim targets for our in-scope assets for the Net Zero Asset Managers initiative(NZAM).PORTFOLIO COVERAGE 100%Increase assets under management(AUM)invested in assets in material sectors(carbon-intensive sectors)that are(i)achieving net zero or(ii)aligned to net zero to 100%by 2040.ENGAGEMENT 90% Ensure thatat least 70%of financed emissions in material sectors are net zero,aligned with a net-zero pathway,or the subject of direct or collective engagement and stewardship actions,and increase this ratio to at least 90%by 2030.SCOPE1 2 EMISSIONS REDUCTION 50%Reduce financed Scope1 2 carbon emissions intensity 50%by 2030 relative to 2019 baseline at portfolio level.11HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONAPPENDIXGOVERNANCESOCIALENVIRONMENTCLIENTSInsights,engagement,and proxy votingState Street Global Advisors approach to proxy voting and issuer engagement is premised on the belief that companies that adopt robust,effective governance and sustainability practices will be better positioned to generate long-term value and manage risk.As long-term holders of the constituents of the worlds primary indices,the informed exercise of voting rights,coupled with targeted and value-driven engagement,is the most effective mechanism for creating value for our clients.Accordingly,our stewardship program proactively identifies companies for engagement and voting to mitigate ESG risks in our portfolios.InsightsOur stewardship program utilizes a risk-based approach to identify material topics deemed likely to have the greatest impacts on the long-term value of our portfolio companies.We publish articles and papers on topics such as climate,stewardship,and executive compensation.Because our aggregate portfolio broadly reflects the market itself,our perspective is that of a universal owner of assets.That means that real-economy carbon emissions reductions,across all sectors and all regions,are critical for our ability to meet our net zero goals by 2050.As near-permanent holders of capital where divestment is not an option,we take a partnership approach in our relationships with portfolio companies and boards,using our stewardship tools to engage with portfolio companies to seek long-term value.Through thought leadership,engagement,and proxy voting,we take an outcome-oriented approach to managing ESG risks and opportunities to our clients investments.See below for some of our recent publications:Asset Stewardship Report 2021 Making It Plain:Our Asset Stewardship Approach The Role of Long-Term Shareholder VoiceEngagementWe hold more than 12,000 listed issuers across our global portfolios.Therefore,the success of our engagement strategy is built on our ability to prioritize and allocate resources to focus on companies and issues that have the greatest potential impact on shareholder returns.To support this process we have developed proprietary in-house screening tools to help identify companies for active engagement based on various financial and ESG indicators.12HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTFactors considered in identifying target companies include:Size of absolute and relative holdings The top holdings of our investment Input from our active equity and fixed income investment teams Companies with poor long-term financial performance Companies identified as lagging market and industry standards on ESG matters Outstanding concerns from prior engagement Priority themes based on an assessment of emerging ESG risksThe intensity and nature of our engagement with portfolio companies are determined by our holdings,engagement culture in a market,and an assessment of the materiality of ESG concerns.We endeavor to build geographic diversity within our engagement activities to reflect our economic exposure to global markets.Proxy votingWe vote at approximately 22,000 meetings annuallyand prioritize companies for review based on factors including the size of our holdings,past engagement,corporate performance,and voting items identified as areas of potential concern.Based on this assessment,we will allocate appropriate time and resources to shareholder meetings and specific ballot items with the expressed purpose of maximizing value for our clients.In 2022,State Street Global Advisors announced that it would offer more investors the ability to direct how shares held in the funds they own are voted.The proxy voting choice program offers eligible investors in certain institutional funds in the U.S.and the U.K.a range of voting policies that will be applied to the voting of shares held in those funds.Voting policies offered as part of the new program will be made available to investors through Institutional Shareholder Services(ISS),a recognized independent proxy voting provider.State Street Global Advisors clients in separately managed accounts already have the ability to either vote their own shares directly or delegate proxy voting of their shares to State Street Global Advisors Asset Stewardship team.13HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTCLIENTSINVESTMENT SERVICINGAt State Street,our Investment Servicing line of business performs core custody and related value-added functions,providing institutional investors with clearing,settlement,and payment services.As one of the worlds largest asset servicers,we have responded to the growing interest in ESG investing with State Street Total ESG an interactive,web-based platform that provides streamlined ESG research,data management,analytics,and reporting tools for clients in all stages along their ESG journeys.Our comprehensive ESG solution equips clients with a flexible and comprehensive capability to analyze ESG data from multiple data providers,identify portfolio risks,and generate ESG reports aligned with various regulatory schemes,in a variety of formats,and on both fund and entity levels.As an established investment custodian and depository services provider,State Street enables the turnkey overlay of fund holding data across a wide range of asset classes on top of multiple third-party ESG data sets;this data can be combined with client proprietary ESG scores,allowing clients to create both standardized regulatory and other customizable reports that help them to identify new investment opportunities and focus their time on alpha-generating activities forming the most comprehensive,customizable,and end-to-end solution inthe ESG asset servicing industry.Our clients most significant ESG issues are data management,climate risk and regulatory risk management,and reporting commitments to collaborative global targets such as Net Zero 2050.By combining our strategic relationships in the ESG data field,our research and analytics expertise,and our ability to address client needs across the front,middle,and back office,we have the capability to help our clients with all of these key concerns.While competitors like data providers,data management companies,or consultants may be able to address a single element of these concerns,State Street has the unique ability to provide an end-to-end,comprehensive solution State Street 14HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTCLIENTSTotal ESG that includes portfolio construction,portfolio and risk management,and regulatory reporting.We have built a team of ESG subject-matter experts who engage with clients and regulators to translate upcoming needs into technology solutions,perform diligence on dozens of emerging ESG data vendors,and support clients with implementations and ongoing guidance to establish ESG best practices.S TAT E S T REE T TOTA L E S GOur solution provides industry-leading ESG data sets from multiple vendors to meet investment and reporting needs across asset classes,enabling:Centralized portfolio and multi-vendor ESG data management,so clients can spend more time optimizing active and passive investment opportunities Measurement of carbon footprint and carbon intensity,scenario analysis,and other risk exposures Compliance rule-setting customized to client oversight models across asset classes Access to industry-leading ESG research and regulatory engagement,making it easy to stay on top of the latest developments Alignment of client portfolios to comply with regulatory reporting such as the EU Sustainable Finance Disclosure Regulation(SFDR)and the Task Force on Climate-related Financial Disclosures(TCFD)It is important to note that State Street Total ESG does not advance a perspective on ESG issues;instead we provide data and analytics to our clients to help them fulfill the approach they have identified for themselves.In recent years,many of our clients faced significant regulatory change,particularly with the introduction of the SFDR in Europe and the global adoption of TCFD standards,requiring transparency on portfolio composition.State Street Total ESG is a dynamic solution that has adapted with the dynamic nature of the ESG industry.As clients look to add more sophistication to their ESG analysis and subsequent disclosures,State Street Total ESG continues to anticipate clients needs and adapts to meet these growing demands.For the TCFD,our solution offers clients risk management,metrics,and target reporting capabilities,allowing clients to effectively measure various climate-related metrics including carbon footprint and intensity,scenario analysis,Paris alignment,and climate Value-at-Risk enabling reporting at any frequency needed,including on-demand.As the needs for the SFDR are quite large in scope,State Street Total ESG further offers comprehensive end-to-end support for this framework,with capabilities such as risk management,Principal Adverse Impacts(PAI)reporting,European ESG Template(EET)support,web disclosures,pre-contractual and periodic reporting as well as language translation services.These reporting capabilities are all supported by our team of subject-matter experts,who stand ready to help clients adapt the reports to their needs.The platform also benefits from our active engagement with regulators.For example,we responded to proposals under consideration by the Securities and Exchange Commission in the U.S.and the Financial Conduct Authority in the U.K.As regulations and cooperative initiatives evolve,we will continue to assist our clients in adapting to change and staying ahead of these requirements.ESG and climate risks pose significant financial risks and opportunities,now and in the future.Through Total ESG,we are well positioned to provide solutions that ease the challenge of ESG measurement,allowing clients to focus on identifying ESG risks and opportunities within their portfolios.15HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT2022 ESG RESEARCH Papers published and accepted in leading financial journals in 2022 included:“Climate Change Vulnerability and Currency Returns”(published in the Financial Analysts Journal)An approach to allocate currency pairs according to a countrys vulnerability to climate change“Climate Solutions Investments”(accepted by the Journal of Portfolio Management)We develop a methodology to identify“pure-play”climate solutions companies and construct portfolios from these companiesIn other new research,Professor Serafeim and State Street Associates researcher Alex Cheema-Fox,investigated the performance of various decarbonization strategies in a year that saw strong performance for carbon intensive assets,publishing the results in“Decarbonization Demonized.”Going beyond developed markets,the team examined how ESG investing performs across asset classes within emerging markets in“ESG Investing in Emerging Markets:An Introductory Survey.”The team also investigated the degree to which ESG has influenced the holdings of institutional investors and their E S G RE SE A RCH A ND T HOUGH T L E A DERSHIPOne of our goals in 2022 was to continue delivering practical thought leadershipas a way to further engage with clients and provide timely insight on important ESG issues.State Street Associates partnership with Harvard Business SchoolWe build lasting relationships with thought leaders in academia and look for ways to translate academic theory into business practice.In 2022,State Street Associates,the research arm of State Street Global Markets,continued its partnership with renowned ESG Professor George Serafeim of Harvard Business School.Professor Serafeims research has been instrumental in illuminating how ESG issues are critical drivers of long-term value and defining frameworks for ESG investing.The joint work by Professor Serafeim and State Street Associates researchers Alex Cheema-Fox and Megan Czasonis helped provide practical approaches for our clients to further integrate ESG criteria into investment management utilizing different approaches and across asset classes.Through its partnership with Professor Serafeim,State Street Associates continues to build on its initial findings,produce a wide range of ESG thought leadership,and provide clients with actionable insights.engagement over proxy votes,and the borrowing of short sellers in“The Effect of ESG on the Global Equities Lending Market.”In addition to the research and publication of thought leadership,in 2022 Professor Serafeim and State Street Associates researchers met with more than 450 clients via roundtables and one-on-one client meetings with CEOs,CIOs,and senior investment management executives.They also presented to more than 1,350 clientsand prospects globally through conferences,seminars,fireside chats,and State Street Associates Summer Session ESG webinars.The team is actively engaging with clients on insights from their thought leadership.Our researchers offer high-value ESG consultative analysis,beta-testing relative carbon exposure analysis for client asset allocation,trading,and engagement efforts.On our Global Markets Insights platform,new proprietary ESG indicators will be added to help investment professionals understand how appetite for decarbonization is changing on both a daily and longer-term basis.Moreover,we will launch publicly available carbon indicators that measure the average carbon intensity and emissions of institutional investors portfolio holdings,globally.In 2023,we expect to publish new insights examining how climate change,physical risks,and transition risks may impact inflation,and how employee diversity and other factors may impact a firms profitability and therefore valuation.16HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTGOVERNANCE18 STAKEHOLDER ENGAGEMENT21 BOARD GOVERNANCE AND ESG MANAGEMENT 25 RISK,ETHICS,AND COMPLIANCE28 OPERATIONAL AND CYBER RESILIENCE31 DATA PRIVACY 17HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCESTAKEHOLDER ENGAGEMENTState Street regularly engages with stakeholders,including employees,clients,shareholders,communities,and regulators.These engagements enable us to understand what matters to them and can inform how we deliver value to our key stakeholders.Employees We facilitate employee engagement by fostering a supportive and inclusive culture and through training and development opportunities,regular employee engagement surveys,employee networks,flexible work programs,and comprehensive benefits.Clients We work closely with our clients to understand their needs and objectives,and deliver value through investment products and servicing capabilities.Shareholders We regularly engage with our shareholders on ESG subjects such as corporate governance,human capital,and climate issues.Communities We strengthen communities through partnerships,affiliations,volunteering,and grants from State Street Foundation.Regulators We connect with regulators on proposed legislation,which enables us to understand the evolving regulatory landscape.18HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCES TAT E S T R E E T SM AT E R I A L T O P I C SBOARD GOVERNANCE AND ESG MANAGEMENTDATA PRIVACYESG INTEGRATIONOPERATIONAL AND CYBER RESILIENCECLIMATE CHANGEEMPLOYEE EXPERIENCEDIVERSITY,EQUITY,AND INCLUSION RISK,ETHICS,AND COMPLIANCEM AT ERI A L I T Y A S SE S SMEN TA critical component of our stakeholder engagement is our materiality assessment.This exercise is an integral part of our own ESG management.In this report,the use of the term“materiality”and other similar terms is intended to reflect matters that we judge to be of most significance to our key stakeholders clients,shareholders,employees,and communities in terms of impact or creating long-term value.We are not using such terms as they are used under the securities or other laws of the United States or any other jurisdiction,or as these terms are used in the context of financial statements and financial reporting.Every two years,we conduct a robust materiality mapping process to help us understand the ESG issues we face and what is most important to our stakeholders.The results help inform how we report on our performance.Our assessment process includes an analysis of potentially material issues,resulting from the review of inputs from multiple reporting frameworks and benchmarking exercises,as well as feedback gathered from surveys and stakeholder interviews.Our last materiality assessment,conducted in 2021,identified the following ESG topics:Board governance and ESG management Climate changeHIS TORY OF E S G ENGAGEMEN TState Street has maintained a long-standing belief that ESG topics are important to consider in delivering value to clients and other stakeholders.State Street Corporation participates in a range of industry partnerships and initiatives to engage and collaborate on ESG topics.The Sustainable Markets Initiative has been State Street Corporations primary external climate-related partnership for the past couple of years.Our chairman and CEO,Ron OHanley,leads the Asset Manager and Asset Owner Task Force within the Sustainable Markets Initiative.The task forces purpose is to find more effective ways of deploying institutional capital to accelerate the transition to a net-zero world.Through our work with the Sustainable Markets Initiative in 2022,we contributed to the introduction of atransition finance framework.Data privacy Employee experience ESG integration Diversity,equity,and inclusion Operational and cyber resilience Risk,ethics,and compliance 19HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTS TAT E S T REE T GLOBA L A DV IS ORS COL L A BOR AT ION W I T H OT HER M A RK E T PA R T ICIPA N T SState Street Corporation participates in a range of industry partnerships and affiliations,often for collaborative purposes and to share research and ideas.We highlight a selection of these affiliations below.We maintain our right to hold independent positions and views and we do not necessarily endorse the views of the affiliations.It is important to note at the outset that,in order to properly exercise the fiduciary duties that we owe to our asset management clients,State Street Global Advisors must always act independently when making decisions regarding how to invest our clients assets and how to vote with respect to the equity securities in which we invest those assets.While we always make our own independent investment and voting decisions when managing our clients assets,we have joined various industry groups,discussed in more detail below,so that we can participate in conversations,discussions,and information sharing with respect to issues that impact global and local markets and that impact the long-term value of our clients assets.We believe that this approach,remaining independent but joining industry groups to participate in industry-wide efforts to drive long-term shareholder value creation,is consistent with the fiduciary duty that we owe to our clients while also allowing us to remain in compliance with the variety of laws and regulations applicable to State Street Global Advisors across the globe.The reasons that we participate in various multi-national organizations and industry initiatives are to expand our knowledge of certain thematic issues and share our views with other industry members and to seek the best available Boston College Center for Corporate CitizenshipBoston Womens Workforce CouncilCambridge Institute for Sustainability Leadership(CISL)CDPCeres Investor Network Council for Inclusive CapitalismCSR EuropeFCLTGlobalInvestment Leaders Group(part of CISL)Investor Leadership Network ISSB Investor Advisory GroupSustainable Markets InitiativeThe Task Force on Climate-related Financial Disclosures United Nations Environment Programme Finance Initiative World Economic Forum Transition Finance Steering CommitteeS TAT E S T REE T CORP OR AT ION E S G A FFIL I AT IONS30%ClubCDPCeres Investor NetworkClimate Action 100 Climate Bonds Initiative Council of Institutional InvestorsInternational Financial Reporting Standards Foundation Sustainability AllianceInstitutional Investors Group on Climate Change Investor Leadership Network Investor Stewardship Group International Sustainability Standards Board Investor Advisory GroupJapan Stewardship CodeNet Zero Asset Managers initiative One Planet Asset Managers initiative Responsible Investment Association CanadaSustainable TradingTask Force on Climate-related Financial DisclosuresTransition Pathway InitiativeUnited Nations Principles for Responsible Investment information regarding sustainability and systemic risks that may help us serve our clients.The following is a non-exhaustive list of the industry organizations and initiatives that we have joined,which are designed to address and explore topics related to material sustainability risks and the development of more sustainable capital markets.20HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTBOARD GOVERNANCE AND ESG MANAGEMENTAs a global systemically important bank,it is critical that we embed strong corporate governance standards and seek to limit potential negative impacts on our economy,society,and stakeholders.Our corporate governance structure is designed to promote the responsible management of the ESG issues we have identified.BOA RD GOV ERN A NCEOur Board of Directors,in their role of overseeing the sound management of the company,have the responsibility to exercise their business judgment in what they believe to be in the best interests of the company and the shareholders,taking into account our regulatory obligations,the interests of the employees,clients,and the community at large,and in so doing enhancing the long-term value of the company.To effectively govern and carry out the business of the company,our Board meets regularly.The Board oversees the strategies,policies,corporate responsibility initiatives,and objectives that inform our operational management.21HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCEP OL ICIE S A ND CH A R T ERSState Streets Board of Directors takes guidance from theCorporate Governance Guidelines and theStandard of Conduct for Directors on the role of the Board and its responsibilities,functions,and conduct expectations.The Board has several committees to assist in carrying out its responsibilities.The mandates of these committees are set out in the charters below:Examining and Audit Committee Executive CommitteeHuman Resources CommitteeNominating and Corporate Governance CommitteeRisk CommitteeTechnology and Operations CommitteeMore information on our current Board committee composition can be foundhere.FOCUS ON CL IM AT E RISK AT T HE BOA RD L E V ELClimate is a major issue of focus for our stakeholders.During the year we worked to develop our climate program to more clearly assess potential climate impacts and manage and mitigate these risks.As part of our first-ever climate risk RECRUI T MEN T FOR GRE AT ER BOA RD DI V ERSI T YWe are very aware of the benefits of increased diversity at State Street.It is one of our central culture pillars helping to reflect the diversity of the markets in which we operate,and bringing greater diversity of thought to support constructive decision-making.The Nominating and Corporate Governance Committee and the Board give consideration to a series of attributes when assessing potential director nominees and new candidates,including demographics such as gender identity,race,and ethnicity,in addition to relevant experience and professional skill sets.In 2022,in line with our strategy for improved inclusion,our Board expanded its criteria for diversity beyond race and gender to include disability and other characteristics related to diversity.E S G M A N AGEMEN TState Street has for some years had a Corporate Responsibility Committee to provide oversight for material ESG issues,which,in 2021,evolved into an ESG Executive Oversight Committee.Reflecting the growing awareness that consideration of ESG issues can impact value creation,in 2022 we continued to review our internal ESG governance processes to strengthen integration of such issues throughout the business.During 2023,we plan to develop and implement an enhanced ESG management model to complement and augment the strengthening of ESG at the Board level.This overarching view reflects how ESG is increasingly woven throughout our business and how we connect our operational initiatives through the ESG lens.identification process,we developed methodologies for measuring these potential impacts,and a climate risk policy and key risk indicators will be implemented later this year.The Risk Committee of the Board receives regular updates in relation to climate risk and State Streets work in this regard.22HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTBOA RD DI V ERSI T YINDEPENDENT DIRECTORSFEMALE DIRECTORSRACIALLY DIVERSE DIRECTORSAre independent directors(12 out of 13)Self-identify as female(4 out of 13)Self-identify as racially diverse(3 out of 13)920#HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTThese changes are important for effective decision-making and execution.We organized the company around three core businesses,with Lou Maiuri,president and chief operating officer,responsible for the Investment Servicing business and Eric Aboaf,vice chairman and chief financial officer,responsible for our balance sheet businesses.Cyrus Taraporevala retired as chief executive of State Street Global Advisors(our Investment Management business)at the end of 2022,and we appointed Yie-Hsin Hung as his successor.The result was a streamlining of our management processes and bodies,including the composition of our management oversight structure.The new framework operates with four aligned and accountable management bodies:1.Executive Committee,our enterprise strategy-setting and decision-making body,comprising the leaders of our three core businesses(Investment Services,Global Advisors,and CONS OLIDAT ED LE A DERSHIP FORUMDuring 2022,State Street implemented a series of organizational changes to further align our management team structure and processes to simplify,deepen,and increase accountability.SH A REHOL DER ENGAGEMEN T Throughout the year we conducted a series of meetings with a number of our major shareholders,an important opportunity for our leadership and the Board to hear their perspectives on issues related to ESG.Topics discussed included our approach to diversity,climate risk,employee engagement,and remuneration.balance sheet businesses),as well as corporate function and key global enterprise roles.2.Investment Services,balance sheet businesses,and Investment Management leadership teams,comprising the key and strategic leaders from the previous Management Committee and beyond who will set the priorities for each of our three core businesses.3.Executive vice presidents(EVPs),representing the executive leadership of our company,responsible for the delivery of our strategic,financial,risk management,talent,and culture objectives.4.Operating Group,comprising all senior vice presidents(SVPs)and EVPs,which brings together this cohort to ensure timely understanding,alignment,and effective management and execution of our priorities.24HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTRISK,ETHICS,AND COMPLIANCERISK M A N AGEMEN TIn the normal course of our business activities,we are exposed to a variety of risks,some that are inherent in the financial services industry,and others that are more specific to our business activities.Our risk management framework focuses on material risks.Many of these risks,as well as certain factors underlying each of them,could affect our businesses and our consolidated financial statements,and are discussed in detail under Risk Factors in our Form 10-K.The identification,assessment,monitoring,mitigation,and reporting of risks are essential to our financial performance and successful management of our businesses.Accordingly,the scope of our business requires that we consider these risks as part of a comprehensive and well-integrated risk management function.These risks,if not effectively managed,can result in losses to us as well as erosion of our capital and damage to our reputation.Our approach to risk management,including Board and senior management oversight and a system of policies,procedures,limits,risk measurement,monitoring,and internal controls,allows for an assessment of risks within a framework for evaluating opportunities for the prudent use of capital that appropriately balances risk and return.Our objective is to optimize our returns while operating at a prudent level of risk.In support of this objective,we have instituted a risk appetite framework that aligns our business strategy and financial objectives with the level of risk that we are willing to incur.25HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCEWe know that a balanced,inclusive,and measured culture helps underscore ethical conduct.Our Compliance Program applies a risk-based approach to ensure both management and control function resources are directed to those risks,regulations,and regulators that represent the greatest exposure and therefore require the greatest level of engagement.Our regulatory change management programs are designed to identify changes to the regulatory environment that impact our legal entities,the products and services they provide,and the operations they conduct.Management and control functions work in concert to ensure that relevance and applicability to State Street are understood and that internal processes,procedures,and controls are designed to address changes in the external regulatory environment.The regulatory landscape is dynamic and continuously evolving.To navigate compliance in this complex environment,we continually seek opportunities to enhance our programs.For example,in 2022,we invested in a reg-tech vendor solution that will be implemented in a phased,firmwide approach to optimize the current regulatory change management processes.The solution is AI-enabled and will provide more timely identification and classification of regulatory changes N AV IGAT ING T HE SHIF T ING WORL D OF COMPL I A NCEAs a global financial institution with operations around the world,State Street is subject to laws,rules,and regulations in numerous jurisdictions and by numerous regulatory bodies.Further,our designation as a global systemically important bank a reflection of State Streets size,complexity,global footprint,and interconnectedness across the financial system comes with heightened supervisory expectations.To address compliance risk7 and the evolving regulatory landscape,our Compliance Risk Management Policy and supporting framework(Compliance Program)sets forth enterprise wide standards for identifying,assessing,monitoring,and reporting on compliance risk.7Defined as the risk of legal or regulatory sanctions,material financial loss,or loss to reputation resulting from failure to comply with regulatory obligations(i.e.,applicable final rules,laws,statutes and regulations,formal regulatory guidance,and self-regulatory organization standards that regulate State Streets legal entities,financial services activities and functions that support those activities).impacting our company,as well as workflow functionality to manage the associated impact and readiness assessments in a more operationally efficient manner.Further,in 2022 we designated Corporate Compliance personnel with responsibility for creating an agile approach to ESG compliance risk management that contemplates the quickly evolving global regulatory landscape,proactively identifying and assessing new regulatory obligations,and implementing responsive compliance risk monitoring and management practices.IN T EGR AT ING E T HIC A L CONDUC T IN TO OUR CULT UREThe value we create for clients is supported by a strong culture of ethical decision-making.We know that a balanced,inclusive,and measured culture helps underscore ethical conduct.To help build that culture,we are consistent and strategic in how we approach and reward compliance and risk excellence.We have both individual rewards programs and disciplinary response mechanisms in place.26HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTWe hold our suppliers to the highest standards when it comes to human rights and closely monitor our supply chain.COMPL I A NCE T R A ININGWe carry out compliance training for our employees to ensure that they understand the standards that have been set for conduct as well as our culture and values.We provide the tools necessary to ensure that our teams are fully aware of how to engage with our clients,prospects,business partners,peers,and other stakeholders.This training curriculum covers a broad spectrum of topics including our Standard of Conduct,Anti-Bribery and Corruption Policy,as well as industry-specific conduct requirements related to issues such as information security and privacy,conflicts of interest,insider trading,and fraud awareness.HUM A N RIGH T S IN OUR SUPPLY CH A INAs a leading global organization with significant geographic reach,we need to ensure that our ethical standards are upheld in our procurement practices and that our suppliers are fully compliant with all human rights laws and regulations.We hold our suppliers to the highest standards when it comes to human rights and closely monitor our supply chain.Further detail on how we manage human rights in our supply chain can be found in our Human Rights Statementand in our commitment to the U.N.Global Compactand our Modern Slavery Statement.OUR CONDUC T S TA NDA RDS COMMI T T EEOur Conduct Standards Committee is responsible for overseeing State Streets program for the enforcement of employee conduct standards.This committee,made up of senior leaders,is tasked with ensuring that we have a consistent approach to applying our conduct standards framework to all matters throughout the organization.As the body responsible for overseeing and reviewing all employee conduct matters,it reviews these matters and decides appropriate responses.In the spirit of transparency and to underscore our culture of risk excellence,we compile an annual report for all employees that highlights noteworthy committee activities,detailing the types of matters that the committee has dealt with and the respective outcomes.Importantly,it highlights conduct examples that fall short of our expectations.27HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCEOPERATIONAL AND CYBER RESILIENCEWith offices in 30 countries,our operations are geographically widespread and diverse.As our business and the financial services industry sector increase in scale and complexity,so does our potential exposure to business continuity and operational threats.How we mitigate the risk of these threats is of paramount importance and a cornerstone of our strategy.Our vigilant approach to building resilience in our operations reflects the high value we place on protecting our stakeholders clients,shareholders,partners,and employees.OPER AT ION A L RE SIL IENCEAt State Street,we define operational resilience as the ability of the firm to prevent,adapt,respond to,and recover and learn from operational disruptions.Given the global interconnected financial markets in which we operate and the changing nature of threats that could impact operations particularly with respect to geopolitical events and increasing cyber threats ensuring we are continuously assessing the resilience of our operations is of paramount importance.28HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALENVIRONMENTGOVERNANCEWe therefore take a proactive,ongoing,holistic approach to identifying a range of disruption threats,be they natural,technical,or adversarial in nature.This includes continuous assessment of geopolitical,cyber,and climate-related threats both near-and longer-term in nature.The potential impact of this is also examined,which may result in the identification of vulnerabilities in the resilience of our operations.Where appropriate we seek to remediate these through a variety of means.These may be short-term in nature(e.g.,the transfer of work from one location to another,establishing split operations capabilities)or longer-term in nature(e.g.,through the careful repositioning of resources to minimize impact where possible).Our business continuity and disaster recovery programs are key to ensuring that we can absorb disruptions should they occur.These programs set standards that require recovery strategies to be in place and regularly tested.These standards,by way of example,include consideration of attributes of the locations of our global workforce and related public infrastructure,and climate and geopolitical factors that could impact their work.This continuous threat assessment and mitigating actions,coupled with regulator incident and crisis management testing and exercises help to ensure that operational resilience is continuously improved,responsive to changing inherent risks,and embedded as a key tenet of our daily operations.CASE STUDY SUPPLY CHAIN DIVERSITYWe have pursued a policy of supply chain diversity over several years,and we know there is merit in continuing to do so.It is one of the most fail-safe mechanisms for supporting supply chain resilience and therefore business continuity.We also maintain processes for ensuring that our suppliers uphold our own high standards of equity and fair treatment,and maintain compliance with local laws and regulations.We regularly review our more than 5,418 preferred suppliers for compliance with relevant human rights laws and regulations,including clauses prohibiting human trafficking and modern slavery.In 2022,we expanded our supplier risk criteria to evaluate vendors for resilience,financial health,and risk exposure,to strengthen our supply chain overall and identify any new areas of potential risk.CY BER RE SIL IENCE The nature of our business means we have custody of extensive amounts of data and information related to our clients and employees.We have identified the potential for data compromise as one of the greatest threats to our business.We recognize the threat posed by cyber breaches and the importance of protecting the data of all our stakeholders.Cyber resilienceis foundational to our business strategy it is not an adjunct to what we do,but an integral part of our offering.We regard our secure approach to data and the digital assets we manage,and our commitment to online safety,as a hallmark of our trusted stakeholder relationships.CASE STUDY RESILIENCE FOLLOWING COVID-19 AND THE UKRAINE WARWhile the COVID-19 pandemic was generally less of an operational threat in 2022,the war in Ukraine served to highlight the impact of geopolitical events on financial markets,whether through energy supply disruptions or the potential for broader escalation of the regional conflict,and to reinforce the importance of business resilience.29HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTGOVERNANCEWe take a strategic approach to managing cyber resilience.We continue to follow our multiyear roadmap of proactively managing potential threats through a combination of world-class cyber intelligence capabilities and skill building throughout our organization.Our cyber defense is led by our Global Cybersecurity(GCS)team,who are tasked with continually improving our cybersecurity,enhancing the skills of our teams,and maximizing operational effectiveness to keep our defenses strong.Our cyber fusion approach is proactive,intelligence-led,and integrated with other parts of our organization.Intelligence-led means we have detailed insights into potential threats and leverage our global capabilities to protect and defend our clients interests.A key development of the year was the opening of our Cyber Fusion Centers in Ireland and the U.S.The implementation expanded our global cyber resilience footprint and provided a 24/7 intelligence gathering and incident response process that provides insights and visibility to our greatest cyber threats.These centers reflect our proactive,pragmatic,and value-driven approach to identifying and managing cyber risks.Combining enhanced intelligence gathering with our industry-leading team of cyber talent provides better insight and management of potential cyber threats.Our Cyber Defense Center(CDC)provides continuous security detection and incident response capabilities,monitoring threats in real-time across the entire State Street corporate network.Its role is to minimize risk to our company,utilizing effective incident response procedures combined with highly trained personnel and the latest industry-leading security tooling.The CDC operates two Fusion Centers in Kilkenny,Ireland,and Phoenix,Arizona,providing nonstop services with full failover and redundancy capabilities.The Cyber Defense Center is a core component of our comprehensive and multidisciplinary cyber security program.Throughout 2022,we continued to increase our cyber resilience resources,investingsignificant effort to attract,develop,and retain top talent.We worked in close partnership with our Global Human Resources team to strengthen our global talent bench,building teams in multiple locations to provide a seamless global resource,particularly in the Cyber Threat Intelligence Group,our advanced threat teams,and our security operations and defense teams.Knowing that the market for skilled cyber talent is highly competitive,we invested in training and development programs to help ensure that our employees are furnished with the right tools to remain at the forefront of cyber resilience.The India GCS Architecture and Engineering Center of Excellence is an extension of the Global GCS function,delivering as one cohesive team co-located with other State Street critical business functions.The team comprises highly skilled and trained cyber professionals,with years of expertise and certification in diverse multidisciplinary skills in areas of identity and access management,cloud security,application security,cyber data and analytics,network security,cyber engineering,automated testing,and security administration.The center allows us to provide critical cyber engineering capabilities strategically on a 24/7 basis,and provides crucial access to talent in todays tight cybersecurity labor market.In 2022,we also saw an increase in collaboration across multiple disciplines within the cyber community,with the common goal of countering potential cyber threats.This gave rise to a significant increase in public-private partnerships to effectively address and combat risks,which we expect to continue as potential threats become more widespread.30HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTDATA PRIVACYThe complexity and geographic reach of our business means we have custody of significant quantities of data belonging to our clients,vendors,employees,and shareholders,across numerous jurisdictions.Our commitment to protecting that data demonstrates the trust at the heart of our relationships with our clients and our people.We have developed frameworks,programs,and policies to manage and protect data transparently and securely.These frameworks,programs,and policies help ensure that we comply with the respective data protection regulations applicable to regions of operation,including the EU General Data Protection Regulation(GDPR).Within State Street,data protection is managed jointly by our Global Cybersecurity(GCS)team and our Privacy Office.As the line between data privacy and data protection blurs,we work ever more closely with our cybersecurity colleagues to protect client data.GLOBA L DATA P OLIC Y A ND COMPL I A NCE T R A ININGOur Privacy Office oversees the governance of personal data,including its use,retention,and disclosure.Through it we have enforced a Global Privacy and Personal Data Protection Standard for all State Street personnel since 2018.All employees attend compliance training on the standard,which also addresses the many variations and differences in local privacy and data protection regulations in our operating regions.31HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXSOCIALGOVERNANCEENVIRONMENTIt is every employees responsibility to safeguard the data entrusted to us,regardless of whether the data subject is an employee,client,or other individual.It is every employees responsibility to safeguard the data entrusted to us,regardless of whether the data subject is an employee,client,or other individuals.In addition to our Privacy Standard and the work of the Privacy Office,individual business units and corporate functions review privacy risks and our ability to mitigate them through our non-financial risk assessment programs.GCS works with State Street information technology,control functions,and business units to support the confidential nature,integrity,and availability of information assets.Over the past few years,we have responded to a significant number of data subject rights requests by individuals,such as California residents and EU data subjects,along with those in other jurisdictions.These data requests most commonly involve data deletion or right to be forgotten requests and are of crucial importance to the data subject,so in addition to responding within the prescribed regulatory timeframe,we are committed to providing the best customer service in fulfilling these requests.In 2022,we created a privacy engineering team to support the Privacy Office and enterprise data privacy efforts.Members of the team have a unique combination of knowledge and experience in the privacy compliance and information technology areas.They perform data protection impact assessments(required by the EU and U.K.)providing a significant capability for our data protection and risk management efforts.As the world transitions to“normal operations”in a post-pandemic era,the dispersed workforce of an emerging hybrid work model creates new challenges for data privacy.State Street will continue to evolve our systems and processes for the safe handling and protection of the personal data of all our stakeholders.CASE STUDY:AN ADVOCATE FOR INVESTORS AND INDIVIDUAL EMPLOYEESWithin our organization the Privacy Office has a unique role as an advocate for the data subject,speaking on behalf of an employee or investor seeking to correct or remove inaccurate data,or an individual whose data has been impacted by an event.In cases requiring rectification,the Privacy Office acts as an advocate helping to facilitate the data subjects ability,within our established procedures,to obtain a resolution.LOOKING AHEAD We have identified and are monitoring several emerging data privacy issues that are likely to gain prominence in 2023,including changes to data privacy laws in China,issues of data privacy during data transfers,and data localization in which local governments or authorities claim sovereign jurisdiction over data.We believe that data localization is a significant concern.A number of individual jurisdictions around the world have implemented their own privacy laws,claiming sovereign rights over certain data they consider to be local.Such claims pose substantial challenges for State Street and other businesses with a broad global footprint.We are developing policies to manage this,educate our people on the implications,and reassure them that their data is safe.In China specifically,significant changes to the nations data privacy laws have been made and,given the strategic development of our business in the region,we continue to take steps to comply with these developments.The role of data privacy in data transfers continues to attract broad interest.We continue to advocate for our people and our clients in developing a level of understanding about this to ensure that we have transparency around the protection of data in the transfer process.32HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT34 DIVERSITY,EQUITY,AND INCLUSION42 EMPLOYEE EXPERIENCE48 CORPORATE CITIZENSHIP52 CORPORATE BALANCE SHEET MANAGEMENT 33HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALSOCIALENVIRONMENTSOCIALDIVERSITY,EQUITY,AND INCLUSIONAt State Street,diversity,equity,and inclusion(DEI)are fundamental to our culture,strategic approach,and how we operate our business.We want our employees to bring their whole selves to work and to feel comfortable and safe in doing so.Promoting a diverse and inclusive workspace brings us a broader range of perspectives and life experiences that encourage innovation and make teams more effective.We believe that our focus on DEI creates value for our clients,our shareholders,our employees,and our communities.As a financial services leader with a global footprint,we also have a responsibility to set an example by our actions and behaviors and to help our clients pursue DEI best practices.Our 10 Actions to Address Racism and Inequality were launched in June 2020,and we continue our efforts to integrate the Actionsinto our culture and to make progress toward achieving their goals across our operations,in our interactions with clients and stakeholders,and in society as a whole.34HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCEENVIRONMENTSOCIALWe know that we have further to go.This year we incorporated DEI priorities into every managers performance review and offered all employees the option of adding DEI to their goals.Leading with inclusion,we take a global approach to our initiatives,acknowledging regional differences while pursuing the shared goal of a culture where everyone feels they belong and has the opportunity to succeed.This puts momentum behind our diversity efforts and helps our employees feel proud to be working at State Street.We strive to challenge our assumptions about our own behaviors,an effort that can raise important issues or identify unconscious habits or beliefs that may be holding us back.As our surveys provide a fundamental measure of employee sentiment,we recently targeted focus groups of employees from underrepresented groups to gauge their sense of belonging.To help employees better understand and address unconscious bias and racism,we worked with strategic learning partners to create best-in-class content and increase access to workshops.Across our learning and development opportunities,we incorporate best practices for inclusive training curricula.See A Culture That Values Learning and Advancement.Our more than24 global employee networks provide opportunities for people of diverse backgrounds to connect and BL ACK EQUIT Y AT WORK CER T IFIC AT ION Building on prior years work with Management Leadership for Tomorrow,in 2022,State Street achieved Black Equity at Work Certification.The designationis a first-of-its-kind,clear standard and roadmap for employers committed to a systematic,results-oriented approach to Black equity in the workplace.State Street is the first global systemically important financial institution to earn this designation and one of only 11companies to ever receive the Bronze Black Equity at Work Certification.In 2022 we also announced our commitment,as one of the first in the industry to do so,to pursuing the Management Leadership for Tomorrow(MLT)Hispanic Equity at Work Certification,which sets clear,measurable standards for companies to achieve Hispanic equity within their organizations and for contributing to Hispanic equity in society.We have developed a rigorous plan to measurably promote Hispanic equity in five core areas,including:Hispanic representation at every level;an inclusive,anti-racist work environment;compensation equity;racially just business practices;and racial justice contributions and investments.Our plan has been approved by MLT,which is the first step toward earning certification.share their distinct cultures,identities,and experiences in a supportive environment.See Employee Networks.2022 GLOBAL FEMALE EMPLOYEES2022 U.S.EMPLOYEES OF COLOR5-Year 2022 Goal for Global Female EmployeesPositionmale3678D522A%Senior Vice President and above(SVP )Managing Director(MD)Vice President(VP)Assistant Vice President(AVP)5-Year 2022 Goal for U.S.Employees of Color Position%Employees of Color2235!27%SVP MDVPAVP 35HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENT2.Sharpened our focus on Black and Latinx talent development through the launch of the Black Leaders Cohort(BLC)and the Latinx Leaders Cohort(LLC),which comprise our most senior Black and Latinx leaders,those at or above managing director level.In addition to providing a sense of community for these leaders,the two groups partner with the strategic organizations to provide insight into themes of employee attraction and retention,and help promote State Street as an employer of choice3.Conducted ongoing anti-racism conversations led by key business managers and mandatory unconscious bias training for all employees4.Implemented DEI practices such as annual inclusive behaviors survey and evaluation of members for management committees5.Increased spend with Black and Latinx suppliers,an example includes distribution of a total of 41percent of deal economics from$3.75million bond issuance to diverse capital firms(see Treasury and ESG Funding Strategies)6.Improved Black and Latinx Board representation,increasing racial diversity to 23 AC T IONS TO A DDRE S S R ACISM A ND INEQUA LI T YOur 10 Actions to Address Racism and Inequality are key drivers of better outcomes within our organization and in society as a whole.While there is more to do,we have made important progress.In 2022,we focused on reinforcing this framework across our global businesses.Our leadership in Europe,the Middle East,and Africa(EMEA)and Asia-Pacific(APAC)took an intentional approach to ensure that the 10 Actions were understood and adapted to regional and local environment and historical situations.Our APAC Diversity,Equity,and Inclusion Council considered how the initiatives could be best applied in Asia,and similar well-attended conversations were held in EMEA.We also identified a need to continue the momentum by expanding conversations about inclusive behaviors across our business,accelerating these programs in APAC and EMEA,and gathering more data in other regions.Progress against the 10 Actions include:1.Improved Black and Latinx senior employee representation7.Leveraged State Street Global Advisors Asset Stewardship efforts by partnering with Russell Reynolds Associates and Ford Foundation to issue a report on best practices for effective oversight of DEI.Read the reporthere8.Improved Black and Latinx representation across our industry by establishing strategic partnerships with organizations such as Black Women in Asset Management(BWAM),who is helping to identify diverse talent in the UK,and Association of the Luxembourg Fund Industry(ALFI),a similar organization in Luxembourg.Learn more about our partnerships here9.Established combating racism as a priority for our State Street Foundation,including Racial Equity and Social Justice studiesof our Grantee Partners in key geographic locations.Learn more about our Massachusetts studyhere10.Increased civic engagement and reflection,providing World Anti-Racism Reflection Moments(W.A.R.M.)for employees and families through monthly global opportunities for reflection and community service to engage on anti-racism and social justice issues 36HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTBOARD700%SENIOR MANAGEMENT(EVP and SVP/SMD)655%MANAGEMENT(MD,VP,and AVP)646%ALL OTHER(Officer and Associate)50P%G E N D E R D I V E R S I T Y O F S TAT E S T R E E T S B O A R D A N D E M P L O Y E E SMaleFemaleEQUI T Y IN AC T ION MON T HThroughout the world,there are systems that privilege some groups over others.In recognizing that reality we also accept a collective responsibility to work for solutions that help to balance these systems so that all stakeholders including our workforce,our clients,and our communities can achieve their best outcomes.During Equity in Action month,which launched in June 2022,we empowered our employees to take action to create a more equitable world.Each week we focused on a specific culture trait with opportunities to engage with Global Diversity,Equity and Inclusion,State Street Volunteers,and BeWell.To honor Juneteenth,for example,we promoted a 10-day Take Action with Your Wallet Challenge.Throughout the month our initiatives focused on:Finding ways of working better together toward an inclusive,diverse,and equitable workplace,business,and community Helping others to succeed in our communities throughglobal volunteer events Celebrating those who volunteered their time to create impact Challenging ourselves to break through personal and professional silos and expand our networks A collaboration between our culture team,employee engagement team,corporate citizenship resource,and global inclusion teams,the program demonstrated our interconnected approach to building a more equitable organization.DISA BILIT Y A ND V E T ER A N INCLUSIONIn keeping with U.N.Convention on the Rights of Persons with Disabilities,State Street regards employees and individuals with disabilities as full and equal members of society.As an inclusive organization,we seek systemic solutions that guarantee accessibility,and combat stereotypes and unconscious bias through training and education that helps all our employees understand the challenges faced by people with disabilities,and work with community groups and other partners to create a mutually supportive framework for progress.37HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTIn recognition of our commitment to diversity,State Street was ranked#44 among the 2022 Diversity Inc.Top 50 the only asset manager to make the list.In 2022 we relaunched our Self-ID program to capture a truer picture of disability within our workplace by asking employees to voluntarily describe their disability status(and other categories such as veteran status,race,ethnicity,etc.)State Street signed the Disability IN CEO Pledge,attended the Disability IN Conference,and partnered with Work Without Limits to conduct disability awareness training for our Talent Acquisition staff.We continued our work on the Global Disability Taskforce,which launched in 2020,attended Military Recruitment events,and continued to support Massachusetts Fallen Heroes.We also launched the Military Recruitment and Retention Taskforce.DI V ERSI T Y INC.TOP 50In recognition of our commitment to diversity,State Street was ranked#44 among the 2022 Diversity Inc.Top 50 the only asset manager to make the list.The survey is the leading assessment of diversity management in corporate America,with more than 1,800 participating companies.The recognition is an endorsement of the body of work we have done as an organization to achieve greater equity.We were rated according to the following criteria:Human Capital Metrics:gender and racial/ethnicity breakdown of representation in overall workforce representation,overall management,senior management,new hires,promotions,and 10percent highest paid populations Leadership Accountability:CEO/senior leadership commitment and accountability,Board of Directors,office of diversity and inclusion,diversity council practices,and representation metrics Talent Programs:employee resource groups,mentoring,high potential and sponsorship programs,practices,and participation metrics Workplace Practices:talent acquisition,talent management,onboarding,diversity training,workforce development and engagement,LGBTQ,people with disabilities,military community,and employee benefits policies and practices Supplier Diversity:spend with companies owned by people from underrepresented groups,accountability,and practices Philanthropy:contributions to nonprofit organizations focused on people from underrepresented groups,employee volunteerism,and matching programs and practicesGENDER EQUA LIT YOur focus on promoting racial and gender equality helps broaden perspectives,demonstrate best practices,and nurture our teams.We support gender equality in the workplace through our flexible work culture and benefits,providing parental and caretaker support by offering child,elder,and personal care programs,referrals and resources,emergency backup daycare for our employees,and paid parental leave benefits,as well as adoption and fertility assistance(all vary by location).38HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTOver the past year,we continued to partner with Boston Womens Workforce Councils 100%Talent Compact,through which companies commit to closing the gender pay gap.We also worked with the 30%Club to improve our efforts to increase female representation at the highest levels of the organization.For the 16th consecutive year,State Street was the presenting sponsor of the 2022 Massachusetts Conference for Women,the worlds largest womens conference.Our Professional Womens Network established the Sponsorship Program in 2019 to build and support a pipeline of leaders for the organization and help bridge the male/female achievement gap.In 2022 we continued our partnership with Kahilla,an online womens resource group dedicated to helping women(particularly women of color)develop the mindsets and skill sets to advance and attain leadership positions.Kahilla provides access to scalable leadership development resources and curated content on a single digital platform.Following a comprehensive utilization review to ensure that Kahilla training and events were being actively used,we increased our participation by providing memberships to 108 additional employees.We plan to promote Kahilla broadly across the organization in 2023 and make the curriculum available to more women than ever before.As a component of our commitment to gender equity,State Street is also taking steps toward greater transparency for its pay structures.See Pay Equity Disclosure.We participate in several initiatives to promote inclusion and gender equity at State Street and in the asset management industry.We worked with external partners to develop new learning options for our Degreed platform,such as“Beyond Equality:Engaging in Equity,”which helps employees better understand gender inequity from an organizational and external perspective,and to deliver a training called the Privilege Project,which uses scenario-based discussions to explore gender privilege in the workplace and other environments.We also partnered with Kaplan Mobray to provide workshops on inclusive leadership and its importance to the organization,including examples in which leaders engage with employees from underrepresented groups(including women).In 2022,we also engaged with the following organizations:Anita Borg Institute for Women and Technology(Grace Hopper Celebration)connects,inspires,guides,and supports women in computing and technical fields,as well as the organizations that employ them and the academic institutions training the next generation.Black Women in Asset Management(BWAM)champions the positive impact of the talented Black women who work in asset management and provides tools that will enable them to thrive.Conferences for Women(CFW)is the largest network of womens conferences in the U.S.The mission of the Conferences for Women is to promote,communicate,and amplify the influence of women in the workplace and beyond.Women in Banking and Finance(WiBF)is a not-for-profit membership association aimed at increasing the representation of female leaders in the banking and finance sector.The program includes enhanced learning,leading to improved performance for employees,and knowledge transfer from experienced leaders to less experienced.39HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTWe encouraged our primary suppliers to source from diverse businesses,which generated more than$68 million in additional diverse spend in 2022.State Street performed well against industry benchmarks and was included among the Top 50 Best-of-the-Best corporations in America for our commitment to diversity and inclusion by the National LGBT Chamber of Commerce and partners in the National Business Inclusion Consortium.ENH A NCING SUPPL IER DI V ERSI T YBuilding on the successful initiatives and progress of the past two years,in 2022 we continued our efforts to increase diversity within our supplier base.Our active partnerships with key organizations led to a substantial increase in spending with diverse suppliers in both the U.S.and the U.K.In 2022,our Tier 1 addressable spend from vendors owned by individuals with disabilities increased more than50-fold year-over-year,while our spending from Black-and Latinx-owned businesses experienced an approximately9%year-over-year increase.To further enhance our Tier 2 efforts,we implemented automation in key areas and encouraged our primary suppliers to source from diverse businesses through our Tier 2 program.This initiative successfully generated more than$68 million in additional diverse spend in 2022.State Street performed well against industry benchmarks and was included among the Top 50 Best-of-the-Best corporations in America for our commitment to diversity and inclusion by the National LGBT Chamber of Commerce and partners in the National Business Inclusion Consortium.In 2021,State Street became the first major bank to issue debt through a diverse syndicate,and,at that time,we committed to using at least one minority-owned firm per deal.Over the past year our Global Treasury team surpassed that commitment,issuing approximately 41%of$3.8billion in total issuance via diverse firms.8 We launched our Sustainability Bond Framework in the fourth quarter of 2022 toenable the issuance of Green,Social,and Sustainability Bonds.A portion of total debt issuance in 2022 included a$500 million sustainable bond issuance,which was underwritten by a syndicate that included veteran-,Black-,women-,and Hispanic-owned firms.In 2022 we established important relationships with new industry partners,including:Womens Business Enterprise National Council National LGBT Chamber of Commerce National Veterans Business Development Council United States Hispanic Chamber of Commerce Finance Services Roundtable for Supplier Diversity8 Veteran-,Black-,women-,and Latinx-owned firms 40HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTAs part of State Streets commitment to transparency,accountability,and action,and following important and productive discussions with a range of internal and external stakeholders,in 2022 we undertook an external civil rights audit to assess our business practices and services from that perspective.PAY EQUI T Y DIS CLOSUREA significant part of our approach to achieving gender equity is in closing the pay gap between men and women.As part of our commitment to equal pay for work of equal value,we regularly assess how women are paid compared to men on a global basis,and in the U.S.,how employees of color are paid compared to their peers.We continued to work with the Greater New England Minority Supplier Development Council,the Massachusetts Competitive Partnership,the Boston Chamber of Commerce Pacesetter program,and the Minority Supplier Development UK in EMEA.These organizations leverage their members purchasing power to increase opportunities for local,ethnic minority-owned businesses.Our partnership with the Management Leaders of Tomorrow led to State Street earning a Cycle 1 Bronze-level certification from Black Equity at Work.Our Hispanic Equity at Work plan has been approved and we are pursuing similar efforts to achieve certification for that initiative.CI V IL RIGH T S AUDI TAs part of State Streets commitment to transparency,accountability,and action,and following important and productive discussions with a range of internal and external stakeholders,in 2022 we undertook an external civil rights audit to assess our business practices and services from that perspective.While the report did not identify any systemic issues,we found areas and opportunities for improvement and intend to publish the results in the first half of 2023.Our annual Pay Equity Review process compares pay between like-for-like roles,adjusting for factors such as job level,location,and job function that make one role different from another.In April 2022 we issued the findings of our most recent review process,which can be found on State Streets public website.We also conducted an unadjusted pay gap analysis,which compares the median pay of all men with the median pay of all women globally,and,in the U.S.,the median pay of all employees of color with the median pay of all white employees.41HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTEMPLOYEE EXPERIENCEWhen employees are engaged,supported,and feel valued,everyone benefits.Employees are able to reach their full potential,employers retain their best talent,and client service is at its best.The desire to create this optimal work environment has been consistent for years at State Street.We strive to maintain a supportive culture one that emphasizes connection and caring for our colleagues,our clients,and our communities.We regard our culture as essential to achieving our business objectives and connecting employees to our companys purpose.In recent years,the challenges of the global COVID-19 pandemic and the momentum toward social justice have led employees to seek a greater connection to purpose and the core values of their employer.We facilitate this connection through our supportive and inclusive culture,effective internal communications,intentional learning and development,and opportunities for engagement in the community.In 2022,we continued our efforts to maintain an environment where employees can excel personally and professionally and where a healthy work-life balance is encouraged.We promote employee health and well-being through our benefits,wellness initiatives,and flexible work offerings.We continued to encourage employee interaction and foster a sense of connection through regular Q&A calls with management,employee forums,and surveys to help our leaders listen and understand our employees concerns and experiences.42HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCEENVIRONMENTSOCIALOUR CULTURE TRAITSOUR BEHAVIORSCARE FOR OUR COLLEAGUES,CLIENTS,AND COMMUNITYHelp others to succeedSeek better ways of working and adopt new solutionsDO BETTER EVERY DAYDrive outcomes for clients,employees,and shareholders while managing risk DELIVER RESULTS WITH INTEGRITY AND SPEEDCollaborate across teams to reach our shared goalsBREAK THROUGH SILOSTake the initiative to deliver business objectivesCHOOSE TO OWN ITOUR CULT UREWe link our corporate strategy and values to desired everyday behaviors that reinforce our culture traits(see sidebar).These traits are aligned to our values and set the stage for how employees interact with each other and our clients.When reinforced in the workplace,these behaviors serve to strengthen an atmosphere in which employees can thrive,which is essential to achieving our business goals.L IS T ENING TO OUR EMPLOY EE SFostering a positive employee experience is only possible when employees feel included,valued,and heard.One way we ensure this happens is by our commitment to employee listening and action through several mechanisms.Each year,we conduct a comprehensive survey with our entire employee population to measure and understand what drives engagement.We also look for factors that,when responded to,will influence positive business outcomes.We also use the findings as part of our action planning to better respond to employee needs and inform organizational improvements for the coming year.State Street managers have access to an online tool to analyze their team results,which are aggregated anonymously to preserve confidentiality of employee feedback,S TAT E S T REE T CULT URE T R A I T SWe employ a behavior-based approach to culture that focuses on amplifying the desired behaviors associated with our five culture traits.43HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTA CULT URE T H AT VA LUE S L E A RNING A ND A DVA NCEMEN TEffective learning opportunities provide career development for our talent,helping us to be higher performing.We empower our employees to define and select learning and career pathways for themselves,in addition to requiredtraining.Ultimately,we believe that effective learning opportunities may reduce our business risk and fuel our growth.We provide a wide range of development and training initiatives that help employees increase their skills and progress toward their professional goals.Our training library includesover a million different learning opportunities,including online courses,videos,posts,and articles.One of our focus areas in 2022 was to increase awareness and use of our learning platforms and resources.The predictive capabilities of the platforms become more effective as user volume increases.Our Degreed Enterprise Learning Platform is a great example.Degreed helps employees and they can examine or respond to suggestions to enhance team engagement and track progress over time.Another way we listen to all of our employees is through intermittent pulse surveys.These shorter surveys solicit feedback on the progress of our engagement efforts as well as seek employee opinion on other ongoing company efforts.The goal is to identify how important elements of our culture show up in our daily interactions and work with our colleagues,peers,and leaders,to identify where improvement is occurring,and where more work remains to be done.Other mechanisms for creating a dialogue with employees are regular blogs from senior executives on our intranet and online discussions with strategic initiative leads on our internal social networking site.In addition,employees have told us they want more structured opportunities to interact with colleagues and management.In response,we host bi-monthly employee calls and monthly manager calls in most regions,along with Town Halls and Leader Forums worldwide for our business groups and regional locations.We also work with our employee network leaders to offer a host of in-person and hybrid networking,learning,and engagement opportunities to foster a sense of community and belonging.BR AVO EMPLOY EE RECOGNI T IONThroughout the year,employees are encouraged to recognize and celebrate colleagues who live our culture traits via our global peer reward and recognition program called Bravo.This program is increasingly important,as the hybrid working model and global team structure do not always allow for face-to-face recognition opportunities.Bravo encourages employees to recognize their colleagues for good work,good deeds,or good ideas anything that reflects our culture traits.Employees have greatly appreciated the opportunity to highlight the work and success of their teammates and amplify those positive stories across the entire State Street global network.In 2022,our employees experienced more than 145,000 recognition moments,which include not just awards received but also the number of times employees thanked or congratulated one another.EMPLOY EE NE T WORK SOur24 employee networks provide forums and opportunities for individuals to come together to share their unique perspectives and experiences,learn from one another,and build community.These affinity relationships help employees feel they belong and are empowered to bring their authentic selves to work.Over 110 chapters worldwide offer in-house networking,mentorship,career development,and training opportunities as well as cultural experiences that reflect the unique interests and goals of each network.Sponsored by senior executives,the networks are managed by volunteer employees and organized around the 4C model:culture,career,commerce,and community.44HOMESTATE STREET CORPORATION|2022 ESG REPORTINTRODUCTIONCLIENTSAPPENDIXGOVERNANCESOCIALENVIRONMENTnavigate our educational library through targeted,AI-driven recommendations based on an employees specific interests and skill profile,helping to ensure that individuals continue to develop in areas most relevant to their role.In addition,individuals and managers can recommend to their colleagues specific training that they have completed to reinforce peer learning.Almost half of the global workforce accessed the Degreed platform 10 or more times in 2022.Our Web Content Accessibility Guidelines provide educational resources and best practices for building and adapting more inclusive training curricula,particularly for those with vision or hearing impairments.Over the past year we began to embed this approach to ensure that newly created resources will be accessible to all.We continued to seek opportunities to drive engagement with our learning platforms,including for example a pilot partnership with a virtual coaching company.It provides mobile device technology that is scalable and convenient,particularly for middle management.In 2023 we plan
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2021 ESG SummaryThe information within this PDF is as of June 28,2022.As a general matter,recent organizational changes(e.g.,acquisitions and divestitures)are reflected in our reporting as soon as data becomes available,at which point,previously reported impacted metrics that are deemed significant are recast to consistently reflect the impact of the organizational changes.Unless otherwise noted,information available with respect to our acquisitions of Hangzhou Haomusi Food Co.,Ltd.(Be&Cheery),BFY Brands,Inc.(BFY),Pioneer Food Group Ltd.(Pioneer Foods),Rockstar Energy Beverages(Rockstar)and SodaStream International Ltd.(SodaStream)is included herein.Targets apply to PepsiCos operations as well as our value chain(e.g.,franchise bottlers,joint ventures where PepsiCo has operational control,co-manufacturers,etc.)unless otherwise noted.12021 PepsiCo ESG SummaryWhat does it mean to be a truly sustainable company?For a long time in the business world,“sustainability”was a buzzword.A term often applied with little consistency and less intention to various disparate initiatives.In some ways,sustainability used to be a side project or a distraction:a drain on precious resources and a potential drag on the bottom line.Those days are over.Our stakeholders consumers,customers,investors,communities,governments,and NGOs demand action.They want a more focused,more integrated approach that places sustainability at the heart of business operations.At PepsiCo,we recognize that the futures of our company,communities,and planet are all inextricably linked.That reality has been driven home again and again in recent years,first by the COVID-19 pandemic,then the deadly conflict in Ukraine.Through it all,climate change has continued to increase its impact on our fragile ecosystems,leading to extreme weather,crop failures,and changes in the range and abundance of certain plants and animals.All of these issues have resulted in a collision of food shortages,supply chain bottlenecks,and a refugee crisis unlike anything Europe has seen since World War II.In this context,we have been thinking hard about what it means to be a truly sustainable company,one that creates growth and value for all of our stakeholders.We know that to be successful five years,10 years,20 years from now,we need to create more resilience in our business.And that means we need to change what we do and how we do it.In September 2021 we launched a strategic,end-to-end transformation of our business.We put sustainability and human capital at the center of how we will create growth and value,by operating within planetary boundaries and inspiring positive change for the planet and people.We call this approach PepsiCo Positive(pep ),reflecting a new reality where consumers,customers,our associates,investors,regulators,and many other stakeholders are becoming more interested in the future of the planet and society.From sourcing ingredients to making and selling our products more sustainably,pep connects the future of our business with the future of our planet.Message from leadershipMessage from the CEO,Ramon Laguarta“We know that to be successful five years,10 years,20 years from now,we need to create more resilience in our business.Ramon Laguarta,Chairman of the Board of Directors and Chief Executive Officer of PepsiCo,discusses regenerative farming practices with UK potato farmer,Gavin Janaway,on a recent trip to the UK.interactions with consumers each day1 billioncrops sourced from over 7 millionacres in more than 30 different countries25 The launch of pep is a turning point for PepsiCo.to help build a more sustainable food system:We have an opportunity to use our scalecountries and territories where our productsare sold200 By advancing our pep goals,we believe we will be a consistent top market performer and a force for good by doing whats right for people and the planet.As we evolve our approach to sustainability,how we report our progress and success will also evolve.This year marks our first-ever Environmental,Social,and Governance(ESG)Summary.The Summary includes how were leveraging our brands,people,and scale to create positive change,and illustrates progress with the latest real-life examples.The revamped digital format seamlessly directs stakeholders to the most relevant information,sitting atop a wealth of detailed data,updated regularly on our time-stamped ESG Topics A-Z resource.Its a significant change for us,but we are starting from a position of strength,as Corporate Secretary has recognized us for best ESG reporting for the second year.I am confident that our reporting will only improve as we work toward a fully integrated structure,where we publish our Annual ESG Summary alongside our Annual Report.22021 PepsiCo ESG SummaryOur ESG approachMessage from leadershipThis inaugural Summary features information on our strategy,goals,and progress with pep and its three pillars:Positive AgriculturePositive Agriculture is about our aspiration to source crops and ingredients in a way that restores the earth,makes the soil healthier,sequesters carbon,and eliminates deforestation whilst also strengthening farming communities.Learn more Learn more Learn more Positive Value ChainPositive Value Chain is our focus on making products that build a circular and inclusive economy,including goals for reaching net-zero emissions,becoming net water positive,introducing more sustainable packaging,continuing our Racial Equality Journey,among others.Positive ChoicesPositive Choices is about using our brands to inspire people to make better choices for themselves and the planet.32021 PepsiCo ESG SummaryOur ESG approachMessage from leadership“PepsiCo remains committed to taking a leadership role in the creation of a more sustainable food system that preserves the planet and positively impacts people and communities across the world.With the ongoing volatility around the globe,our pep agenda continues to be the right path for our planet and our business.Jim Andrew Chief Sustainability Officer“The investments we have made in pep aim to ensure the sustainability of our business and the hundreds of thousands of jobs we support across our global supply chains creating growth and value within planetary boundaries while inspiring positive change for people and the planet.Hugh Johnston Vice Chairman and Chief Financial OfficerA Message from the CEO,Ramon LaguartaTo illustrate how pep looks in practice,take how we envision the transformation of products like our iconic Lays potato chip.Lays is already the worlds largest food brand.To maintain that position,we need to continue to work toward our goals and take decisive and sustainable actions.That means the chip you love will start with a sustainably grown potato on a regenerative field.Then the chip will be made and delivered from a Net-Zero and Net Water Positive supply chain,sold in a beautiful bio-compostable bag,and be the best tasting product with the lowest sodium levels in the market.Thats the future of the#1 potato chip.That is the future of our company.With the current uncertainty in the world,there might be a temptation to slow down our investments in pep .I dont believe we should do that.In fact,we should,and will,do the opposite.As leaders,we should continue investing in sustainable packaging and regenerative agriculture,making our supply chains more sustainable and ensuring our brands innovate in positive spaces.By becoming better ourselves,we not only meet the needs of our stakeholders but position ourselves for long-term growth.We can help define for the world what it means to be a truly sustainable company,and build a stronger,more resilient future for us all.Ramon LaGuarta PepsiCo Chairman of the Board of Directors and Chief Executive OfficerCSO messageCFO message42021 PepsiCo ESG SummaryOur ESG approachMessage from leadership12021 PepsiCo ESG SummaryAbout PepsiCoOur vision is to Be the Global Leader in Beverages and Convenient Foods by Winning with PepsiCo Positive(pep ).pep is our strategic end-to-end transformation that puts sustainability and human capital at the center of how we will create value and growth.times each day PepsiCo products are enjoyed around the world1 billionemployees300,000 net revenue in 2021$79 billionOur ESG approachcountries and territories where our products are sold200 pep pillarsWere charting a new course to drive positive action for the planet and people.A better food system means better outcomes for the earth,and all of us.By becoming better ourselves,we can help build a stronger,more sustainable future for us all.pep will guide our business how we operate within planetary boundaries and inspire positive change for the planet and people.Were evolving how we source our ingredients and make and sell our products,and how we inspire people through our brands.Positive AgricultureWere working to source our crops and ingredients in ways that restore the earth and strengthen farming communities.Learn more Positive Value ChainWere helping to build a circular and inclusive value chain.Learn more Positive ChoicesWere inspiring people through our brands to make choices that create more smiles for them and the planet.Learn more 22021 PepsiCo ESG SummaryOur ESG approachOur value chainAcross our value chain,PepsiCo is using our global reach and expertise to drive solutions at scale.PepsiCos sustainability strategy targets every stage of our complex value chain to use resources more efficiently,reduce greenhouse gas(GHG)emissions,replenish water,improve our products and recapture packaging materials.Investments in our circular and inclusive value chain will help accelerate the systemic change needed to address major global challenges.Agricultural SourcingPepsiCo sources crops from more than 30 countries and supports more than 100,000 jobs throughout our agricultural supply chain.The standards we apply and promote can help improve the environmental,social and economic health of agricultural communities around the world.R&D and ManufacturingWe spent$750 million on R&D in 2021 as part of our continued investment in developing quality and innovative beverages and convenient foods.Our 294 manufacturing facilities bring together innovators and operations teams who work to use water,energy and ingredients efficiently to create our beverages and convenient foods.In 2021,we produced more than 90 million metric tons of beverages and convenient foods.DistributionPepsiCo products are sold in over 200 countries and territories.In 2021,our company-owned fleet traveled approximately 1.2 billion miles worldwide to bring PepsiCo products to customers.We are working to reduce the impact of those miles by continuing to adopt more efficient vehicles and practices.ConsumptionPepsiCo products are enjoyed by consumers more than 1 billion times a day.Were responding to changing consumer preferences by transforming our product portfolio and reformulating many of our beverages and convenient foods to reduce added sugars,sodium and saturated fat.Post-ConsumerPepsiCos sustainable packaging vision is to help build a world where packaging never becomes waste by driving the shift from a linear economy to a circular economy.We continue to grow our portfolio of Beyond the Bottle offerings,innovate to develop sustainable packaging and work to improve recycling infrastructure.1 5 4 2 1 2 3 4 5 332021 PepsiCo ESG SummaryOur ESG approachOur sustainability journeyIn 2006,PepsiCo started on a journey to transform the way we do business so that we can deliver strong financial returns in a way that is responsive to the needs of the world around us.2006Launch of Performance with Purpose,integrating sustainability into our daily business operations2021PepsiCo announces a 2030 goal to spread regenerative agriculture practices across 7 million acres,estimated to eliminate at least 3 million tons of GHGs2021PepsiCo sets an ambitious new target to achieve net-zero emissions by 2040,one decade earlier than called for in the Paris Agreement2021PepsiCos Net Water Positive vision sets a new standard in water stewardship2021PepsiCo is recognized with the inaugural Terra Carta Seal awarded by His Royal Highness The Prince of Wales and Sustainable Markets Initiative for demonstrating commitment to,and driving momentum towards,the creation of genuinely sustainable markets2020PepsiCo exceeds safe water access goal 5 years early,delivering access to safe water to more than 55 million people to date since 20062009Naked Juice first U.S.brand to transition to 100%rPET bottles2012 PepsiCo wins prestigious Stockholm Industry Water Award2013Sustainable Farming Program(SFP)launches;as of 2021,more than 90%of grower-sourced crops are sustainably sourced worldwide through SFP20171st demonstration farm opens in India;in 2021,72 farms are testing and sharing best practices around the world2018PepsiCo acquires SodaStream,#1 sparkling water brand in the world by volume,with the potential to avoid 200 billion single-use plastic bottles by 20302010Our first all-electric delivery trucks hit the road2019PepsiCo receives Climate Leadership Award2020PepsiCo achieves shift to 100%renewable electricity in U.S.direct operations2021pep (PepsiCo Positive)is introduced42021 PepsiCo ESG SummaryOur ESG approachOur reporting strategyOur reporting is the primary way that PepsiCo informs key stakeholders about our sustainability ambitions and progress.Our stakeholders include investors,potential and current employees,customers and consumers,suppliers,non-governmental organizations(NGOs),regulators and others.Understanding that stakeholder needs differ,we publish a suite of reporting elements,targeted at different stakeholder groups.We combine disclosure of strategy,policy,data and case studies,according to our understanding of stakeholder interest.Our reporting suite comprises:This ESG Summary:An evolution from our prior Sustainability Report,our digital ESG Summary provides a high level overview of our pep agenda and progress made during the year.It aims to demonstrate the integration between ESG and our business,and is designed to link seamlessly with ESG Topics A-Z for more detail and the latest updates.Users can also use the Report Builder functionality to download a version tailored to their interests.ESG Performance Metrics:Time-series data for our key sustainability goals,intended to support ESG analysis,primarily for financial stakeholders,ESG raters and NGOs.Indices and framework responses and other topic-specific disclosures:These map our reporting to specific metrics established by key reporting frameworks including the Global Reporting Initiative(GRI),the Sustainable Accounting Standards Board(SASB),the Task Force on Climate-related Financial Disclosures(TCFD)and CDP(formerly the Carbon Disclosure Project)climate,water and forest responses.It also includes specialized reporting,such as our annual Green Bond Reports.ESG Topics A-Z:An evergreen deep-dive on around 50 sustainability-related topics designed to provide accessible,consistent information for those looking for greater depth on PepsiCos ESG strategy,management,policies,progress and partnerships.We are constantly evaluating our goals and progress,assessing the technical and regulatory challenges we face in achieving our ambitious objectives,and innovating new ways to keep moving forward.As frameworks and regulations continue to expand in the U.S.,Europe and beyond,and as we encounter new challenges and opportunities,our commitment to transparency in reporting our strategy,goals,initiatives and progress on ESG topics will remain steadfast.GovernanceWe believe strong governance is the foundation for delivering on our pep (PepsiCo Positive)agenda.At PepsiCo,our ESG approach is integrated into,not separate from,our business.In governing using this approach,we maintain a similarly integrated structure that combines Board and senior leadership oversight with the subject-matter and localized expertise that informs our strategy and how we execute it.The full Board considers ESG issues to be an integral part of its business strategy oversight.To this end,our Sustainability,Diversity and Public Policy Committee assists the Board in providing more focused oversight of key sustainability,diversity,equity and inclusion and public policy matters.This Committee is comprised entirely of independent directors and reflects a mix of public policy,risk,international and science-related skills,qualifications and experience.Strategy and progress against our pep goals are regularly reviewed during meetings of an Executive Committee sub-committee composed of members of our senior leadership management team and also reviewed as part of the expanded Executive Committee agenda.This provides opportunities for our senior leadership to align on major strategic issues relating to ESG.PepsiCos Global Sustainability Office,led by the companys Chief Sustainability Officer with Sustainability teams in each sector,drives governance and delivery of the companys sustainability agenda across the value chain.Serving as the central connection point,the Sustainability Office works closely with leaders from across the business to drive continued progress against our pep agenda and ensure that ESG is embedded into our long-term strategic planning.Learn more about PepsiCos pep Governance on our ESG Topics A-Z Learn more about how we are making a difference.Goals and progress Philanthropy ESG Topics A-Z Downloads 52021 PepsiCo ESG SummaryOur ESG approachpep pillarsOur agricultural footprint covers approximately 7 million acres,and our supply chain supports more than 100,000 agricultural jobs worldwide.We work with tens of thousands of farmers to source more than 25 crops and ingredients from more than 30 countries around the world.The goal is a sustainable food system that respects natural resources and makes a positive impact on the people and communities we work with and serve.Its better for people,better for the planet and better for our business.We are taking a landscape approach to advancing regenerative agriculture,marked by collaboration between stakeholders within a designated region often spanning multiple crops,sectors and land uses to advance shared sustainability goals while reconciling and optimizing multiple social,economic and environmental objectives.And because real change requires long-term,consistent effort,we have launched several initiatives tackling some of our key commodities with this approach in the Midwest U.S.,Mexico and Southeast Asia,and plan to expand into new priority landscapes as we progress on our Positive Agriculture journey.PepsiCos business starts with agriculture.A steady,sustainable supply of crops is central to our business.Positive Agriculture122021 PepsiCo ESG SummaryAgricultureClimate-related impacts like excessive heat,drought or flooding can impact farm yield and productivity.So weve taken steps designed to source our crops in ways that respect natural resources,strengthen farming communities and ensure a secure supply of ingredients for our products.Were supporting regenerative agricultural practices that aim to make soil healthier,sequester carbon,improve watershed health and biodiversity,and strengthen farmer livelihoods.Were working closely with our farmers and intermediary suppliers to embed these practices throughout our agricultural supply chain.Our footprint Were using our scale,influence and expertise to do more than just reduce our own impact.Our strategy prioritizes investment,innovation and collaboration with our farming partners and suppliers to deliver positive impact around the world.PepsiCos business relies on a steady,sustainable supply of crops delivered bythousands of agricultural workers:acres of farmland make up ouragricultural footprint 7 millionagricultural jobs supported100,000 in our networkTens of thousands of farmerskey ingredients and crops sourced from more than 30 different countries25 of our grower-sourced crops aresustainably sourced globally90 res farmed with regenerative farming practices toward goal of 7 million by 2030 345,000 We are using our scale,influence and agricultural expertise to help build asustainable food system.1 Globally,more than 90%of grower-sourced crops were sustainably sourced through our Sustainable Farming Program(SFP),up from 87%in 2020.For grower-sourced crops,sustainable sourcing refers to meeting the independently verified environmental,social and economic principles of PepsiCos Sustainable Farming Program.2 Regenerative acres reported for 2021 include U.S.and Canada only.Regenerative acres demonstrate measured improvement in sequestering carbon to reduce GHG emissions AND at least one other of the following:improved soil health,improved watershed health,improved biodiversity or improved livelihoods.Positive Agriculture32021 PepsiCo ESG SummarySource our crops and ingredients in ways that restore the earth and strengthen farming communities.Spread the adoption of regenerative agriculture practices across 7 millionacres,approximately equal to 100%of the land used around the world to grow our crops and ingredients for our products12021345,000 acres to date22030 Goal7 million acres0Regenerative agriculture goal1 Regenerative acres reported for 2021 include U.S.and Canada only.Regenerative acres demonstrate measured improvement in sequestering carbon to reduce GHG emissions AND at least one other of the following:improved soil health,improved watershed health,improved biodiversity or improved livelihoods.2 PepsiCo introduced and began to measure its new regenerative agriculture metric in 2021.Progress presented here reflects our first year tracking this metric and builds on years of partnership and investment in sustainable agriculture.3 Definitions of regenerative agriculture vary and were working across stakeholder groups to align on a standard definition.4 In the U.S.,we helped farmers plant cover crops on over 85,000 acres,an example of how using this regenerative agriculture practice can result in up to a 38%net reduction in on-farm greenhouse gas(GHG)emissions,including soil carbon sequestration.ApproachWe define regenerative agriculture3 as a set of farming principles and practices that improve and restore ecosystems while building resilience.Our approach is outcome-oriented,and to some extent,we are practice agnostic.Thats because every farming community is different,with different needs.Were tracking how soil health,greenhouse gas(GHG)emissions reduction and carbon sequestration,watershed management,biodiversity and the livelihoods of agricultural workers are improving.There are some practice categories weve identified that help drive those results,and we are working on scaling them.Regenerative techniques not only protect against soil erosion and water depletion,but they can also help farmers grow more food on the same amount of land.These techniques typically require fewer inputs,so they can also lead to higher margins and greater profitability for our farmers.In 2021,we launched an internal co-investment fund to incentivize our local teams to design and scale innovative solutions that contribute to our Positive Agriculture agenda.Now in its second year,the Positive Agriculture Outcomes Fund provides a unique mechanism that reduces the risk and cost of projects with long-term sustainable business potential.To date,nearly$2 million has been granted through the Fund.In addition,we understand societal concerns around pesticides and are actively seeking continuous improvements in agricultural practices that minimize pesticide and other agrochemical use.We established a cross-functional Global Pesticide Council composed of senior leaders across key functions to evaluate pesticide issues and direct the Companys policies and programs.The Council has developed a five-year strategic plan with clear deliverables,including industry benchmarking,and centralized global scientific and regulatory tracking.We also engage with multi-stakeholder groups,peer companies and NGOs to develop,promote and adopt best practices related to responsible use of reduction in on-farm GHG emissions through use of cover cropsUp to 38%of participants in demo farm programs adopted regenerative practices100%Goals&progress 4Positive Agriculture42021 PepsiCo ESG SummaryWhat is regenerative agriculture?Our 72 demonstration farms show the benefits of regenerative farming techniques Build soil health and fertility Rebuild organic matter Train farmers for on-field agronomy Use resource-efficient/compost fertilizers Plant multiple crops in same fieldReduce and sequester CO2 Plant cover crops to sequester CO2 underground Promote reduced and no-till cultivation for minimal soil disturbance Systemic crop and livestock rotationProtect and enhance biodiversity Commitment to no deforestation Pollinator strips on farms Soil microbe breeding Use of natural pesticidesImprove farmer livelihoods Teach most vulnerable farms in supply chain Support women farmers economically Source directly from growers whenever possible Protect workers rightsImprove and restore natural ecosystemsIncrease crop yields by growing more food on the same amount of landFeed more people with fewer inputsImprove farmer livelihoods through higher sales margins and greater profitabilityNet reduction of on-farm GHG emissionsWhat we doHow it helpsIntroduce water efficiency techniques Help farmers access more efficient irrigation equipment Support best practices for scheduling and maintenance Transition from flood irrigation to more efficient methods(i.e.,drip irrigation and“fertigation”)Positive Agriculture52021 PepsiCo ESG SummaryIn collaboration with our internal experts,industry peers and cross-sector partners,we have developed a practice bank of those activities and practices that contribute to our Regenerative Agriculture goals,a database that we introduced in May 2022 to our farmers and suppliers.Its the reason why we joined forces with several strategic partners worldwide to understand the specific needs to fight climate change in every sector in which we operate.Alongside organizations such as CIAT(International Center for Tropical Agriculture),GIZ,Foundation for Food and Agriculture Research,U.S.Farmers and Ranchers Alliance,World Farmers Organization,AgroScout and others,we are supporting farmers to implement adaptive practices,reduce GHG emissions in agriculture and strengthen their field knowledge and management to respond quickly in a targeted way so we can all continue driving the pep agenda forward.We actively support farmers in our supply chain with programs to make it easier for them to adopt regenerative practices.In the U.S.,we helped farmers plant cover crops on over 85,000 acres,resulting in up to a 38%net reduction in on-farm GHG emissions,including soil carbon sequestration1 and provided support to more than 600 farmers in North American farmland by the end of 2021.Our demonstration farms program showcases practices that are leading to the commercialization of innovative ag-tech and the scaling of proven practices that lead to regenerative outcomes.The demonstration farms enable the farmers we work with to share their firsthand experiences,which encourages broader adoption.In 2021,we worked with 20 different partners to demonstrate farming best practices in areas such as nutrients,water-use efficiency and precision farming.In 2021,our partnerships yielded value for farmers,the environment and the business(percent increases observed in a control plot vs a demonstration plot):In 28 demonstration farms in India,we saw average yield improvements of almost 7%and reduced GHG emissions by more than 7%,resulting in farmer income increase of$55 per acre on average.In Thailand,we worked with the Department of Agriculture and other partners to implement integrated pest and nutrient management and install drip irrigation systems on our demonstration farms,resulting in an average yield increase of 25%(on seven farms),a 23rbon emissions reduction and a more than 40%reduction in water use in irrigation.In Mexico,we demonstrated ways to save water through different irrigation techniques and improvements in existing irrigation systems.We reduced water use in irrigation by 36%on average while increasing potato yields by 8%.By the end of 2021,we had 72 regenerative demonstration farms as part of the program and over 600 farmers transitioned from demonstration into broader“landscape”impact programs to scale up proven innovation.In a landscape approach,farmers in a region align around shared sustainability goals and commit to specific regenerative practices.PepsiCo and our partners support work within the landscape to spread the adoption of regenerative agriculture and deliver outcomes,such as GHG emissions reduction,through funding independent advisories for farmers,facilitating coaching and peer support and financially incentivizing adoption of regenerative practices.As we advance on our Positive Agriculture journey,and more farms learn the benefits of regenerative agriculture and adopt its practices,we expect to continue to expand into new landscapes and grow the number of regenerative farming acres we annually report toward our goal of 7 million by 2030.In 2021,we launched several landscape initiatives tackling some of our key commodities in the Midwest U.S.,Mexico and Southeast Asia.Climate resilience is also a key priority to safeguard our operations for many years to come.1 For PepsiCos corporate GHG footprint,the company follows the GHG Protocol framework where any sequestration is kept separate from the three scopes of emissions.Positive Agriculture62021 PepsiCo ESG SummaryHealthy watershed goalApproachAdvocate for and contribute to a measurable improvement in the health of high water-risk watersheds where we directly source our crops,including an improvement in water-use efficiency of 15%by 202512025 Goal15%improvement2019-202032016-201814#%1 15%improvement goal measured versus a 2015 baseline.The metric was previously reported in our Water section.To focus efforts on implementing sustainable practices,we currently intend to collect and publish agricultural water-use efficiency data at least every three years.High water-risk locations defined by WRIs Aqueduct tool.2 Results reflect the exclusion of Pioneer Foods,BFY Brands,Inc.(BFY)and Hangzhou Haomusi Food Co.,Ltd.(Be&Cheery).3 Data for 2021 not available,as we measure this at least every three years.Through advocacy and our own initiatives(including promoting regenerative techniques),were working to measurably improve the health of high water-risk watersheds where we directly source our crops and aim for a more sustainable way to use this resource.At the end of 2021,we sourced approximately 40%of our grower-sourced key ingredients the building blocks of our beverages and convenient foods from areas of high water-risk.These efforts are designed to help ensure our continued access to the water we need for production as well as preserve water access for the communities in which we operate.Weve targeted a goal of improving water-use efficiency by 15%by 2025,compared to a 2015 baseline,throughout our operations.Progress against this goal is measured at least every three years and was last measured in 2020.Around the world,it is a common practice to use flood or trench irrigation to bring water to crops,causing farmers who use these methods to potentially lose up to 70%of the water used to runoff or evaporation.In the search for a better solution,we partnered with N-Drip,an Israeli company whose irrigation system is powered by gravity and harnesses the water-saving benefits of high-pressure drip irrigation without the need for the energy costs and water filtration associated with high-pressure drip irrigation.PepsiCo aims to scale N-Drips technology to help improve farmer livelihoods with higher yields,reduced water consumption and reduced GHG emissions.The goal is global adoption of N-Drip water efficiency technology across 10,000 hectares(25,000 acres)by 2025.In 2022,we plan to expand N-Drip in India,South Africa and the United States as well as kick off a pilot in Greece.The N-Drip cost-share project in India was made possible as a result of a grant from the Positive Agriculture Outcomes Fund.granted through our Positive AgricultureOutcomes Fund$1.8 millionhectares will benefit from our N-Drippartnership through 202510,000Positive Agriculture72021 PepsiCo ESG SummarySustainable sourcing goal1 For grower-sourced crops,sustainable sourcing refers to meeting the independently verified environmental,social and economic principles of PepsiCos Sustainable Farming Program.For supplier-sourced crops,sustainable sourcing is achieved through a third-party standard that has been benchmarked as equivalent to the SFP or,in limited regions,a continuous improvement program addressing the main environmental and social risks with growing the relevant crop.Percentage of volume sustainably sourced and verified by third parties,including volume of certified sustainable palm oil meeting Roundtable on Sustainable Palm Oil(RSPO)standard and volume of certified sustainable cane sugar meeting Bonsucro or equivalent standard.2 Cane sugar:Results reflect the exclusion of SodaStream and Pioneer Foods.ApproachWere already using sustainably sourced ingredients in many of the PepsiCo products consumers know and love.Weve established sustainable sourcing standards as a baseline expectation for our agricultural suppliers,and were supporting farmers in making the transition to more sustainable approaches.These efforts aim to ensure a secure supply of key ingredients while helping improve the livelihoods of farmers in our supply chain.Around 50%of the volume of our key ingredients are bought directly from farmers through a grower group(“grower-sourced”),while there are multiple tiers between the farmer and PepsiCo for the other approximately 50%(“supplier-sourced”).Toward our 2030 goal of reaching 100%of sustainably sourced key ingredients,in 2021,we achieved more than 90%on grower-sourced crops as we continue to engage our main suppliers globally.To achieve our goals,we engage suppliers through two approaches:High-risk approach:requires high-risk commodities(palm,cane and soy)and commodities grown in high-risk markets to be verified/certified to a sustainability standard recognized by PepsiCo.Low-and medium-risk approach:consists of working with suppliers to adopt a continuous improvement model,requiring them to demonstrate active work and progress toward outcomes by 2030.These efforts seek to ensure a secure supply of key ingredients while helping improve the livelihoods of farmers in our supply chain.Sustainably source 100%of our key ingredients,expanding to include not only our grower-sourced crops(potatoes,whole corn and oats),but also key crops from third parties,such as vegetable oils and grains1,2202150%0 30 Goal100%Positive Agriculture82021 PepsiCo ESG SummaryWe supported farmers in making the transition to more sustainable approaches:Positive Ag Supplier PlaybookIn 2022,we launched a Positive Ag Supplier Playbook at our Supplier Summit,a public resource for buyers and suppliers to activate the goal across our entire key ingredient footprint.MexicoIn 2021,in Mexico,PepsiCo partnered with a supplier to pilot the Bonsucro Smallholder Standard,which resulted in 25 smallholder producers becoming certified among the first in the country.Southeast MexicoIn 2021,in Southeast Mexico,we launched Agrovita,a collaborative effort to strengthen the technical capabilities of 1,000 smallholders to implement regenerative agriculture,increase women empowerment and reduce smallholder carbon footprint.Southeast Asia:In 2021,in collaboration with leading palm oil players,we launched the Rimba Collective the largest private sector-enabled forest conservation initiative in Southeast Asia for palm oil,to deliver$1 billion for forest conservation and restoration.Positive Agriculture92021 PepsiCo ESG SummaryImproving livelihoods goalApproachPeople are the foundation of the worlds food system and our business.To ensure the long-term health of both,its essential for agricultural workers to earn a wage that enables them and their families to grow and thrive.Yet thats not always the reality in many parts of the world.We support the advancement of farming practices to optimize crop yields,respect human rights and plan to improve the livelihoods of more than 250,000 people in our agricultural supply chain and communities by 2030.This includes economically empowering women.Weve focused our efforts on our most vulnerable farming communities,including smallholder farmers and farm workers,women and minority farmers.Women farmers make up about 40%of the agricultural workforce in developing countries but are often denied key resources that could help them prosper.These resources include,among others,access to land,livestock,education,financial services,agricultural advisory services,technology and rural employment.If women had equivalent resources,it is estimated they could increase their yields by 2030%and increase the agricultural output of their countries by up to 4%,potentially reducing the number of hungry people in the world by 100 million or mitment to reduce GHGs in agriculture through AgMission$5 million to support women-led enterprises through our USAID partnership$20 millionImprove the livelihoods of more than 250,000 people in our agricultural supply chain and communities,including by economically empowering women.Goal introduced with the launch of pep in 2021.Progress reporting for this metric is in process.Positive Agriculture102021 PepsiCo ESG SummaryOn this matter,we are drafting the livelihood measurement outcome indicators to track the number of livelihoods improved in PepsiCos agricultural supply chains and communities.The indicators are designed to be relevant across different crops,scale of operations and geographies.PepsiCo and the PepsiCo Foundation promote greater diversity and inclusion in farm management,including support for female farmers and people of color,through partnerships with organizations like the U.S.Agency for International Development(USAID),Inter-American Development Bank(IADB),CARE and the National Black Growers Council.In 2021,we continued working with USAID on a 5-year,$20 million partnership to support women-owned and women-led enterprises among PepsiCo suppliers in rural farming communities in Asia,the Middle East and Latin America.The programs will improve resiliency in these communities and show that inclusivity leads to better business results.We launched the Next Generation Agriculture Fund with the IADB,a partnership in which we aim to test and demonstrate the impact of gender-smart solutions along our agricultural supply chains in Dominican Republic,Ecuador and Guatemala.This three-year,$2 million partnership between PepsiCo LatAm Corporate Affairs,the Global Sustainability Offices Agriculture team and the IADB includes an innovative talent acquisition and development program,as well as field activities that pilot the use of inclusive and gender-smart solutions that enhance farmers resilience and contribute to PepsiCos Positive Agriculture goals.Our promotion of regenerative agriculture techniques and support for open-source agricultural technology and information also helps improve farmer livelihoods.Regenerative practices can help farmers increase yield,leading to higher margins and greater profitability.Our support programs,such as cost-sharing for cover crops and peer-to-peer learning at our demonstration farms,help farmers ease the transition.Support for open-source agricultural technology and information can have a similar impact.We worked with Corteva Agriscience to sequence an entire oat genome and made it publicly available to enable the creation of more resilient,productive and profitable varieties.In addition,we became a founding partner of AgMission,an unprecedented initiative to reduce GHG emissions in agriculture with a$5 million commitment to expand our efforts toward creating a more sustainable planet.Across the board,we see bilateral,multilateral and pre-competitive partnerships as critical to the ongoing success of pep ,the achievement of our 2025 and 2030 goals and the overall resilience and sustainability of our key supply chains.They are instrumental in leveraging and mobilizing a wide range of technical and financial resources that support farmers as they make the transition to more regenerative and inclusive practices,ones that will contribute to improved environmental and social outcomes.We cannot achieve these ambitious sustainable business objectives without these collaborations across supply chains,geographies,industries and sectors.Explore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the agriculture-related links below.Agriculture Climate change Deforestation Land rights Sustainable sourcing Water Read our latest sustainability and community impact stories pep pillarsOurs begins with the crops grown by our farmers and suppliers,which are made into food and drinks and packaged at our manufacturing facilities,then delivered to stores where they are purchased,consumed and later recycled or collected as waste.PepsiCo is building a circular and inclusive value chain to accelerate the systemic change needed to address major global challenges.A value chain is the full range of activities needed to create a product or service.Positive Value ChainWere taking direct action aimed to reduce impacts relating to climate,minimize water use and introduce more sustainable packaging.We are also working to increase racial equality and provide meaningful jobs and opportunities.12021 PepsiCo ESG SummaryPositive Value Chain:ClimateOur world is already feeling the effects of climate change and faster,bolder action is needed.Reducing greenhouse gas(GHG)emissions will benefit society and its also crucial to the viability of our business,as we are experiencing the impacts of climate change directly within our own value chain.Urgent action is needed to decouple economic growth from carbon emissions.The increasingly severe impacts of climate change are affecting the quantity and quality of agricultural raw materials for our products,creating weather patterns and events that affect the operation of our facilities and supply chain and limiting the availability and quality of water.To achieve the level of decarbonization that the world needs to avert the worst impacts of climate change will require action at every level.At PepsiCo,were striving to achieve net-zero emissions by 2040,a decade earlier than called for in the Paris Agreement and weve set an ambitious interim goal for reducing absolute emissions across our value chain by more than 40%by 2030,including a reduction of 75%in Scope 1 and 2 emissions(2015 baseline).These goals will not only have meaningful impact in themselves,but will also drive greater scale for systems like renewable energy and regenerative agriculture,which must become standard in our industry.Reduce virgin material use,increase recycled materials like rPET and use low-carbon alternatives or renewable materialsScale sustainable agricultureMITIGATION ACTIONSReducing greenhouse gas(GHG)emissions to decarbonize our supply chainContinue to develop sustainablemanufacturing,warehousing and distributionShift to renewableelectricity and fuels globallyOur climate action strategyDrive regenerative agricultureand explore heat-resistant crops to address climate change effects on growing cyclesDecarbonizeahead of a potential carbon taxRESILIENCE OPPORTUNITIESReducing vulnerabilities to the impacts of climate change by incorporating climate risk into business continuity plansIncrease water securitythrough holistic watershed solutions to manage droughtsPlan manufacturing footprint adjustmentsfor sea level rise/potential floodingEnhance business continuity plansin preparation for extreme weather eventsReaching net-zero GHG emissions while increasing business resiliencyReduce virgin material use,increase recycled materials like rPET and use low-carbon alternatives or renewable materialsScale sustainable agricultureMITIGATION ACTIONSReducing greenhouse gas(GHG)emissions to decarbonize our supply chainContinue to develop sustainablemanufacturing,warehousing and distributionShift to renewableelectricity and fuels globallyDrive regenerative agricultureand explore heat-resistant crops to address climate change effects on growing cyclesDecarbonizeahead of a potential carbon taxRESILIENCE OPPORTUNITIESReducing vulnerabilities to the impacts of climate change by incorporating climate risk into business continuity plansIncrease water securitythrough holistic watershed solutions to manage droughtsPlan manufacturing footprint adjustmentsfor sea level rise/potential floodingEnhance business continuity plansin preparation for extreme weather eventsReaching net-zero GHG emissions while increasing business resiliencyReduce virgin material use,increase recycled materials like rPET and use low-carbon alternatives or renewable materialsScale sustainable agricultureMITIGATION ACTIONSReducing greenhouse gas(GHG)emissions to decarbonize our supply chainContinue to develop sustainablemanufacturing,warehousing and distributionShift to renewableelectricity and fuels globallyDrive regenerative agricultureand explore heat-resistant crops to address climate change effects on growing cyclesDecarbonizeahead of a potential carbon taxRESILIENCE OPPORTUNITIESReducing vulnerabilities to the impacts of climate change by incorporating climate risk into business continuity plansIncrease water securitythrough holistic watershed solutions to manage droughtsPlan manufacturing footprint adjustmentsfor sea level rise/potential floodingEnhance business continuity plansin preparation for extreme weather eventsReaching net-zero GHG emissions while increasing business resiliencyPositive Value Chain:Climate22021 PepsiCo ESG SummaryGoals&progressAchieve net-zero emissions across our value chain by 2040GHG emissions reduction goalScope 1 and 2 emissions reduction goalScope 3 emissions reduction goal1 Measured versus a 2015 baseline.2 Where 2021 actual data was not available,estimated 2021 data was used.Goal timeline extended to 2030.Goal ambition increased from 20%to more than 40%reduction.2021 Scope 3 progress impacted by increased packaging use,transportation,third-party manufacturing and other purchased goods due to business growth.3 Results reflect the exclusion of Be&Cheery and certain Scope 3 emissions for other acquisitions where data is not available.4 Goal timeline extended to 2030.Goal ambition increased from 20%to 75%reduction.5 Where 2021 actual data was not available,estimated 2021 data was used.Goal timeline extended to 2030.Goal ambition increased from 20%to 40%reduction.2021 Scope 3 progress impacted by increased packaging use,transportation,third-party manufacturing and other purchased goods due to business growth.Reducing Scope 3 emissions by 40%1,52030 Goal40%reduction202032021320182019(5)%2%3%3%Reducing Scope 1 and 2 emissions by 75%1,42030 Goal75%reduction20202021201820172016201925#%9%6%4%1%Reducing total Scope 1,2&3 emissions by more than 40%1,22030 Goal40%reduction202032021320182019(2)%2%3%5%Positive Value Chain:Climate32021 PepsiCo ESG SummaryApproachOur climate action strategy is focused on mitigation to reduce GHG emissions and decarbonize our supply chain,and resilience to reduce the vulnerability of our supply chain to climate change-related impacts.Informed by science,we target areas where our investments can have the greatest impact,while creating scalable models and partnerships to accelerate progress across the full value chain.On our journey to achieve our overarching goal of net-zero emissions by 2040,were working to reduce absolute GHG emissions by more than 40ross our entire value chain by 2030.Our emissions target aligns to the Business Ambition for 1.5C pledge and has been approved by the Science Based Targets initiative.Were planning to transition to 100%renewable electricity through a diversified portfolio of options across all our company-owned and controlled operations globally by 2030 and across our entire franchise operations by 2040.We are investing in zero-and near-zero emission delivery vehicles for our company-owned fleets and partnering with others to support decarbonization of the broader transport industry.We are improving energy-use efficiency and working to scale renewable fuel solutions at our manufacturing facilities.PepsiCo is proud to be among the companies that are putting substantial investment behind climate action.We issued a Green Bond in 2019,one of the first food and beverage corporations to do so,and as of the end of 2020,$858 million of the net proceeds had been allocated to investments that can make a lasting impact on our sustainability goals in packaging,decarbonization and water.Were working to scale regenerative agriculture practices that reduce emissions and sequester CO2 across the equivalent of our 7 million acre global agricultural footprint,through efforts like our demonstration farm program.Were investing in research and development of bio-based materials,increasing recycled content in our packaging(targeting 50ross our plastic packaging by 2030)and working with peers,policymakers and innovators to develop recycling infrastructure,while advocating for smart policies and engaging consumers in our vision that packaging never becomes waste.These global challenges will require partnership and collaboration among many companies and organizations,as well as international cooperation.We are actively engaged in and seeking out partnerships that help us further our goals.To reach these ambitious goals,were transforming how we operate across our entire value chain.of our global electricity needs in our direct operations were met by renewable sources70%top corporate buyer of clean powerin North America11th1 Total renewable electricity as a percentage of total electricity associated with manufacturing&warehouse operations,fleet operations,offices and distribution centers.2 This metric is ranked by the EPA Green Power Partnership.Explore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the climate-related links below.Climate change Renewable energy Fleet efficiency 12021 PepsiCo ESG SummaryOur path to net water positive As a beverages and convenient foods company,PepsiCo is acutely aware of the critical role water plays in the food system,and it is our vision that wherever in the world PepsiCo operates,water resources will be in a better state because of our presence.We were one of the first companies to acknowledge access to clean,safe water as a fundamental human right and essential for health,well-being,dignity and economic mobility.In this era of COVID-19,safe water access is more important than ever.The PepsiCo Foundation is already more than halfway to our goal of delivering safe water access to 100 million people by 2030.Positive Value Chain:WaterHow is PepsiCo working to be net water positive?USE LESS WATERHowIncreasingwater efficiency in manufacturing:Piloting technologies to capture,condense and clean water used in potato chip manufacturing Adopting Alliance for Water Stewardship Standard in high water-risk manufacturing facilities Working with franchise bottlers and third-party manufacturers to raise water efficiency standards in supply chainTo ensure safe drinking water for communities where we operateREPLENISH WATERHowPartnering with leading NGOs to deliver nature-based solutions to strengthen and repair degraded ecosystems by:Restoring wetlands and forests burned down by fires Removing non-native species that negatively impact local watersheds Using solar pumps and other sustainable land management tools to control water levels and prevent runoffTo protect local watershedsPROVIDE SAFE WATER ACCESSHowInvesting in distribution,purification and conservation programs that:Support the construction of water supply and sanitation facilities Help farmers irrigate their crops by collecting,treating and reusing rainwater Improve access to hygiene in schools and sanitation in householdsTo mitigate risks to our manufacturing water supplyWhyPositive Value Chain:Water22021 PepsiCo ESG SummaryOperational water-use efficiency goalNet zero water goalLocal watershed replenishment goal1 25%improvement goal measured versus a 2015 baseline.High water-risk locations defined by WRIs Aqueduct tool.Between 20062015,water-use efficiency improved by 26%in global legacy operations.2 Results reflect the exclusion of Be&Cheery.3 All best-in-class and world-class results for 2021 do not reflect inclusion of third-party facilities4 Best-in-class water-use efficiency for beverages sites is defined as 1.2 liters/liter of beverage production.Best-in-class water-use efficiency for convenient foods sites is defined as 0.4 liters/kg of convenient foods production.World-class water-use efficiency for beverages sites is defined as 1.4 liters/liter of beverage production.World-class water-use efficiency for convenient foods sites is defined as 4.4 liters/kg of convenient foods production.5 Results reflect the exclusion of SodaStream and Be&Cheery,and do not reflect inclusion of third-party facilities.Goal ambition expanded to include third-party facilities(100%)and more than 100%for company-owned operations by 2030.Improve operational water-use efficiency by 25%in high water-risk areas by 20251,22025 Goal25 202021201820172016201918%9%4%2%1 2120215.04.42030 Goal1.41.82030 Goal2.40.42030 Goal20212021Convenient Foods(liters/kg)Convenient Foods(liters/kg)1.81.2Beverages(liters/liter)Beverages(liters/liter)2030 GoalBest-in-Class High Water-Risk Manufacturing Sites2,4World-Class Non High Water-Risk Manufacturing Sites2,4Ensure we have net water positive impact by achieving:Best-in-class water-use efficiency in 100%of high water-risk manufacturing sites,PepsiCo and third-party facilities3(for PepsiCo facilities,this equates to more than 50%reduction in absolute water use from 2015 baseline year)World-class water-use efficiency in all other manufacturing sites,PepsiCo and third-party facilities3Replenishing back into the local watershed more than 100%of the water we use52030 Goal100 202021201820172016201934%8%9%Goals&progressPositive Value Chain:Water32021 PepsiCo ESG SummaryApproachAs one of the first companies of our size to acknowledge water as a human right,we have a vision to become“net water positive.”We have adopted an approach to watershed management that includes improving water-use efficiency across our value chain:on farms and in manufacturing facilities;replenishing water in the local watersheds that are most at risk and where we operate;and increasing safe water access for communities that face scarcity.Our target to become net water positive in 100%of high water-risk company-owned and third-party manufacturing facilities by 2030 means achieving best-in-class water-use efficiency at company-owned facilities in high water-risk areas(a more than 50%reduction in absolute water use against a 2015 baseline),and world-class efficiency at all other manufacturing facilities.To meet our efficiency goal,were expanding our focus from about 100 manufacturing sites to more than 1,000 sites around the world,including 350 sites in high water-risk areas.Achieving our goal will place us among the most water-efficient food or beverage manufacturers in the world.We are also in the process of adopting the Alliance for Water Stewardship Standard at 100%of our company-owned high water-risk manufacturing sites by 2025.We are piloting innovative manufacturing technologies,including a groundbreaking method to recover more than 50%of the water used in potato chip manufacturing by condensing and treating evaporated steam,effectively capturing and reusing the water contained in the potato that would have otherwise been“lost”as steam.Our pilot testing showed the approach could save approximately 60 million liters of water a year.To achieve our goal of replenishing more than 100%of the water that we use back into the local watershed by 2030,weve established strong partnerships with leading NGOs such as The Nature Conservancy and the World Wildlife Fund(WWF)to deliver nature-based solutions that strengthen and repair degraded ecosystems.Last year alone we replenished more than 6.1 billion liters of water through these projects.We also serve on the corporate advisory group for water for the Science Based Targets Network(SBTN),piloting the draft methodology for setting science-based targets for water.Water Stewardship Standard goalContinue to adopt the Alliance for Water Stewardship(AWS)Standard in high water-risk manufacturing areas,by 2025,as a vehicle for water advocacy10202032019High Water-Risk Facilities Adopting the AWS Standardfully adopted AWS Standardin the process of adopting AWS Standard202131343people delivered safe water accessby the PepsiCo Foundation since 200668 millionliters of water replenished intolocal watersheds in 20216.1 billionExplore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the water-related links below.Water Agriculture Human rights 12021 PepsiCo ESG SummaryHow were working toward our vision of a world where packaging never becomes waste:Our sustainable packaging visionPepsiCo envisions a world where packaging never becomes waste.While packaging is an essential component of our business making PepsiCo products convenient,more affordable and easy to distribute we share the concern over the impact of packaging waste.Our broad-based strategy includes reducing the plastic we use,driving recycling and use of recycled materials,and reinventing our packaging to use new renewable materials or drive growth in low-or no-packaging formats.A circular economy for packaging can help ensure that the valuable materials that are used in packaging are recycled and reused,rather than becoming waste.Using renewable or recycled materials also reduces the GHG impact of our packaging,supporting our emissions reduction goals.Positive Value Chain:PackagingLightweight packagingExpand market for reusable solutionsCut down on shipping and other packaging materialsREDUCEIncrease collection rate through Every Bottle BackInvest in recycling infrastructure upgradesSupport community efforts to expand access to recyclingRECYCLEDevelop plastics from non-food,plant-based sourcesExplore biodegradable and compostable optionsInvent low or no packaging solutionsREINVENTPositive Value Chain:Packaging22021 PepsiCo ESG SummaryVirgin plastic reduction goalNon-renewable virgin plastic reduction goalBio-based and recycled plastic reduction goal1 Measured versus a 2020 baseline.2 Goal expanded in 2021 to 50%for beverages and convenient foods.3 2021 performance impacted by increased plastic use due to business growth.4 Goal timeline extended to 2030 and goal expanded to 50%recycled content.Goals&progressCut virgin plastic from non-renewable sources per serving across our global beverages and convenient foods portfolios by 50%1,220215%0 30 Goal50%Reducing our absolute tonnageof virgin plastic derived from non-renewable sources by 20021(5)0 30 Goal20%Use of market-leading bio-based materials and increase incorporation of recycled content(50ross plastics)420216%0 30 Goal50%Scaling new business models that avoid or minimize single-use packaging materialsGoal introduced with the launch of pep in 2021.We are in the process of establishing our reporting methodology for this metric.Minimize single-use packaging materials goalPositive Value Chain:Packaging32021 PepsiCo ESG SummaryApproachAt PepsiCo,we recognize the role we can play in creating a circular economy for packaging.Were aspiring to use our reach and influence to help change the way society makes,uses and disposes of packaging.Yet systemic change is not something we or any single organization can accomplish alone.Were in dialogue with policy makers and working with industry coalitions,producer responsibility organizations,trade associations and community-based organizations throughout the packaging value chain to improve infrastructure,advocate for sustainable policies and accelerate innovation.Weve announced ambitious new goals around our aim to reduce our use of virgin plastic,use more recycled content in our plastic packaging and scale business models like SodaStream that avoid or minimize single-use plastic.These new targets complement our 2025 goal of making 100%of our packaging recyclable,compostable,biodegradable or reusable.Achieving these ambitious goals requires investment and innovation.We face challenges from the limitations of existing technology and regulations.But our commitment to continue to strive toward these goals is unwavering.Thats why were scaling new business models that avoid or minimize single-use packaging materials.These include models that reuse,refill,prepare at home or utilize concentrates like powders or drops.Were also seeking to use market-leading bio-based materials and more recycled content(50%global markets are transitioning severalbrands to 100%rPET packaging by 202222across our plastic packaging)to reduce absolute tonnage of virgin plastic from non-renewable sources across our entire portfolio.To further reduce use of single-use plastic packaging,we plan to set a time-bound goal by the end of 2022 for a percent of volume of beverages to be delivered via strategies that avoid or minimize single-use packaging,such as reusable and refillable bottles or containers.In 10 European markets,key Pepsi-branded1 products are expected to switch to 100%rPET2 bottles by 2022.Moving to rPET bottles is estimated to reduce GHG emissions by roughly 30%per bottle.In the U.S.,we sell LIFEWTR in 100%rPET bottles and Pepsi Zero Sugar will begin to be sold in 100%rPET bottles by the end of 2022(we plan to convert all Pepsi-branded products in the U.S.to 100%rPET bottles by 2030).In 2021 and 2022,we launched 100%rPET beverage products in Australia,New Zealand,Vietnam and Argentina.We are transitioning several brands to 100%rPET across 22 global markets.In early 2022,PepsiCo Europe set a new ambition to use 100%recycled or renewable plastic in all crisp and chip packets by 2030,which is expected to reduce GHG emissions from film packaging for food by up to 40%.plastic bottles are expected to be avoidedby 2030 through SodaStream adoption200 billion 1 Includes Pepsi,Pepsi MAX,Pepsi MAX Lime,Pepsi MAX without caffeine,Pepsi Light,Pepsi Light without caffeine.2 Abbreviation for“recycled PET(polyethylene terephthalate)”plastic.Positive Value Chain:Packaging42021 PepsiCo ESG Summary1 Goal expanded in 2021 to include reusable packaging,updated metric not measured in prior years.ApproachWe are exploring renewable,non-fossil-fuel-based sources for packaging materials,such as plant-based materials that are safe,efficient and have a lighter carbon footprint than fossil-fuel based plastics.We prioritize materials that avoid the use of food resources or virgin plastics,like bio-based materials,and have partnered with other organizations to develop these materials and scale new technologies.We are a member of the NaturALL Bottle Alliance and its effort to significantly reduce the carbon footprint of beverage containers,and work with the Pulpex consortium to develop the worlds first fully recyclable paper bottle that we are working to commercialize and scale.To reduce plastics across primary,secondary and tertiary packaging,we have light-weighted our bottles,reduced thickness of our films and cut down on shipping and other packaging materials.By investing in breakthrough food packaging technology,we are now able to introduce a commercially compostable bag made of plant-based materials.Our Frito-Lay plant-based brand Off The Eaten Path offers this commercially compostable packaging in the U.S.at Whole Foods stores.To support our goal of creating a circular food packaging system,we license this technology to other companies at no cost.Were also continuing to scale new business models that avoid or minimize single-use packaging materials.Sustainable packaging goalWe expect the growth of our global SodaStream and SodaStream Professional business will help consumers avoid an estimated 200 billion plastic bottles through 2030.As part of this effort,SodaStream is bringing PepsiCo flavor options such as Pepsi Zero Sugar,Lipton and bubly and SodaStream Professional to additional markets by the end of 2022.Design 100%of packaging tobe recyclable,compostable,biodegradable or reusable by 2025187 25 Goal100 212020Positive Value Chain:Packaging52021 PepsiCo ESG SummaryRecycling rate goalApproachSystemic change requires partnership across the packaging supply chain.PepsiCo is working with peers,policy makers and innovators to drive progress toward a circular economy.Were helping to develop infrastructure,advocating for smart policies and engaging consumers so that packaging never becomes waste.We support well-designed Extended Producer Responsibility(EPR)policies and are investing resources and expertise into recycling infrastructure improvements.Since 2018,PepsiCo and the PepsiCo Foundation have announced more than$100 million to global recycling partnership initiatives to help elevate recycling rates and waste collection.In late 2021 and early 2022,we announced we will invest$15 million in the Closed Loop Partners(CLP)Leadership Fund,a private equity fund focused on strengthening recycling infrastructure and building circular supply chains,and$35 million to help create the Closed Loop Local Recycling Fund,to advance new small-scale,modular recycling systems in communities across the U.S.We are also a founding partner of CLPs Composting Consortium,a founding member of the Closed Loop Infrastructure Fund,and have invested in the CLP Beverage Fund through American Beverages Every Bottle Back Initiative.Explore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the packaging-related link below.Packaging Invest to increase recycling rates in key markets by 20251Our actions include:Educating and encouraging consumers to recycle Partnering to increase and improve recycling infrastructure and building solutions for current and future material streams1 Further information on partnerships,including with Closed Loop Partners,the Alliance to End Plastic Waste and Circulate Capital,are detailed on the Packaging page on ESG Topics A-Z.12021 PepsiCo ESG SummarySelected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeWORKFORCEMore than 300,000 associates around the globeSelected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeWORKFORCEMore than 300,000 associates around the globeBring safe water access and sanitation to 68 million people since 2006Delivered 245 million nutritious meals to 41 million people through our Food for Good program1Invested more than$71 million globally in COVID relief and worked with over 250 partners to bring food and other vital resources to the most affected communities as of 2021GLOBAL COMMUNITIESPepsiCo and the PepsiCo Foundation provided funding to:Selected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeOur positive impact on people Helping to create a more diverse,equitable and inclusive workplace and world is the right thing to do.Its also a business imperative.Positive Value Chain:PeopleAs a leading global company,we have a unique opportunity to use our scale and influence to help address societal challenges.We will continue to help address inequalities for historically marginalized people and underserved businesses and communities.Selected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeWORKFORCEMore than 300,000 associates around the globeSelected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeWORKFORCEMore than 300,000 associates around the globeBring safe water access and sanitation to 68 million people since 2006Delivered 245 million nutritious meals to 41 million people through our Food for Good program1Invested more than$71 million globally in COVID relief and worked with over 250 partners to bring food and other vital resources to the most affected communities as of 2021GLOBAL COMMUNITIESPepsiCo and the PepsiCo Foundation provided funding to:Selected examples of how were using our scale and scope to have a positive impact on peopleIncreased Black and Hispanic manager representation in the U.S.to 8.3%and 9.5%,respectivelyReevaluated degree requirements,implemented skills-based hiring and created more pathways to salaried positionsProvided more than 80 volunteer opportunities through One Smile at a TimeWORKFORCEMore than 300,000 associates around the globeWORKFORCEMore than 300,000 associates around the globeBring safe water access and sanitation to 68 million people since 2006Delivered 245 million nutritious meals to 41 million people through our Food for Good program1Invested more than$71 million globally in COVID relief and worked with over 250 partners to bring food and other vital resources to the most affected communities as of 2021Selected examples of how were using our scale and scope to have a positive impact on peopleGLOBAL COMMUNITIESPepsiCo and the PepsiCo Foundation provided funding to:1 245 million meals delivered since 2009 and 41 million people reached since 2016.Positive Value Chain:People22021 PepsiCo ESG SummaryJob growth goalVolunteer growth goalApproachPepsiCo has a history of investing in programs and initiatives to help our associates grow and develop.Today we are building on that history with new programs aimed at making PepsiCo an even better place to work and empowering our associates to make a greater impact on their communities.We have launched digital learning and development platforms on a global basis as part of our plan to digitize the employee experience and make it easier for associates to connect and collaborate regardless of location.This digitization is made possible by providing employees with new technology solutions such as occupancy sensors,a workspace reservation app,smartboards and integrated meeting technology.We are developing new training,upskilling and advancement programs aimed at providing meaningful growth opportunities to associates at every career stage.For example,myeducation is a new debt-free program that will help more than 100,000 frontline and professional U.S.-based associates develop their capabilities and take their career in a new direction.myeducation offers access to more than 100 flexible education and upskilling programs from highly reputable schools and universities.PepsiCo will cover 100%of tuition costs,books and fees for a wide variety of education programs within the debt-free catalog.Frontline associates are the core of our workforce,and we want to make sure they can build meaningful careers.Were creating greater transparency around frontline job opportunities,reevaluating degree requirements for roles and eliminating these where possible,implementing skills-based hiring and developing pathways to salaried positions.Yet a meaningful job is more than day-to-day responsibilities.Our One Smile at a Time program is a local volunteer initiative to encourage,support and empower associates with the resources and time needed to cultivate prosperity in their community.One Smile at a Time is accessible in more than 21 languages and provides a framework,resources and infrastructure for associates to access and register for volunteering opportunities through the PepsiCo Foundation,our Employee Resource Groups,Green Teams and our individual brands.At the same time,we are ensuring that our associates have the skills that our business needs to succeed in the future.Goals&progressProvide meaningful jobs and growth opportunities for our people and empower them to make a positive impact at work,at home and in their local communitiesIncrease the employability of our people through increased access to degrees,skill development and new roles,providing meaningful growth opportunities to everyoneat every stageOur 2021 actions include:Launching a tuition assistance program giving U.S.associates access to 100 debt-free degrees,certificates and trades programs Increasing breadth and depth of self-paced learning content in our learner experience platform Initiating platform rollout for frontline learning that is easier to access and navigateEmpower our associates withthe resources and time neededto cultivate prosperity in ourcommunitiesOur actions include implementing the One Smile at a Time program to:Empower our associates who volunteer with the resources they need Unleash the passion of our employees,especially our frontline associates Provide opportunities to volunteer and micro-volunteer Enable employees to connect with their colleagues and communities Provide a simple way to sign up,track and show impact through a digital platform Provide clear communications to all employees and find ways to engagePositive Value Chain:People32021 PepsiCo ESG SummaryRacial Equality Journey managerial representation goalsAchieve 10%Black representation in U.S.managerial populations18.3%8.0 25 Goal10 212020Achieve 10%Hispanic representation in U.S.managerial populations19.5%9.3 25 Goal10 212020In 2020,we launched our Racial Equality Journey(REJ),a more than$570 million set of commitments with a focus on three pillars:People,Business and Communities.Within our own walls,we focused on increasing the representation of Black and Hispanic associates at PepsiCo,to mirror the workforce availability of the communities where we work,through active recruitment,education,internships and apprenticeships.Outside our walls,were using our scale and influence across suppliers and strategic partners to increase Black and Hispanic representation and elevate diverse voices.In our communities,were working to drive long-term change by addressing systemic barriers to economic opportunity and advancing economic empowerment for Black and Hispanic Americans.Reduced inequalities goalWeve expanded our supplier base and are on track to increase our spending with Black and Hispanic suppliers by more than$500 million by 2025.We launched the$50 million Juntos Crecemos platform to strengthen Hispanic-owned businesses(specifically restaurants,bodegas and meat markets),address foundational business challenges and support business growth over five years.The PepsiCo Foundation created the IMPACTO Hispanic Business Accelerator to provide$10 million in funding to help 500 Hispanic small food and beverage business owners in 13 cities across the U.S.,and launched a$10 million investment with the National Urban League(NUL)to launch the Black Restaurant Accelerator Program.Over the course of the five-year program,the PepsiCo Foundation and NUL will provide 500 Black restaurant owners in 12 cities with capital,technical assistance and mentorship services.PepsiCo and the PepsiCo Foundation created a new$40 million scholarship and professional mentoring program to support Black and Hispanic aspiring and graduating community college students.The program aims to support 4,000 students over five years.Continue to help address inequalities for historically marginalized people,and underserved businesses and communitiesOur actions include:Increasing our engagement and programs at colleges and universities to cultivate and increase hiring of diverse talent Tailoring our tools and resources,while continuing to deepen our engagement with external advocacy organizations to support our diverse workforce,including associates with disabilities,LGBTQ associates,veterans and communities of color Developed skill-building programs to elevate business impact,while focusing on sponsorship and mentorship of our diverse talentGoals,progress&approachBuild a better workplace and world by advancing human rights and diversity,equity and inclusion(DE&I)for our people,in our business partnerships and our communities1 Goal added to pep vision in 2021.Positive Value Chain:People42021 PepsiCo ESG SummaryPay equity goalSupplier Code of Conduct goalWe have a longstanding review process designed to promote pay equity across employee groups.Were building on that history as we strive to achieve our goal of pay equity by implementing a more comprehensive global pay equity review process.In 2021,we implemented this process in 72 countries that collectively make up more than 99%of our salaried employee population.Our results show that among this population,women and men are paid within 1%of each other(based on base compensation),after controlling for legitimate drivers of pay such as job level,geographic location and performance ratings.We are committed to driving fair and safe working conditions throughout our value chain,and we have established a goal that will extend the principles of our Supplier Code of Conduct to all our franchisee and joint ventures by 2025.As part of this process,we have updated the contractual requirements for new partners to help clarify our expectations going forward and have initiated a formal program to engage our franchisees and joint ventures on our human rights agenda.Achieve and sustain pay equityfor our global professionalpopulation by maintaining a comprehensive global pay equity review processWomen and men continue to be paid within 1%of each other.1Extend the principles of our Supplier Code of Conduct to all of our franchisees and joint ventures by 2025Our actions include:Continuing to engage directly with our franchise and joint venture partners on our pep priority areas,including human rights Completing expansion of our Sustainable Sourcing Program to franchise and joint venture partners in Europe and Latin America1 After controlling for legitimate drivers of pay and based on base compensation;analysis excludes frontline.U.S.and U.K.included in 2016 analysis.21 countries included in 2017 analysis.33 countries included in 2018 analysis.69 countries included in 2019 analysis.71 countries included in 2020 analysis,representing more than 99%of salaried population.72 countries included in 2021 analysis,representing more than 99%of salaried population.Women in management goalWe believe that ensuring that women have equal access to employment and promotion is necessary for a prosperous and sustainable society.As part of our commitment to making actionable improvements for women,we are focused on retaining and growing diverse talent through mentoring,coaching and development programs throughout career stages.These efforts include our Women with Purpose program,a partnership with FUNDES Latin America that provides education,employment and entrepreneurship opportunities to more than 12,000 women from 20162022.We are investing approximately$1.8 million in this program.Achieve and sustain 50%women in management roles2025 Goal50 202021201820172016201943AA98%Positive Value Chain:People52021 PepsiCo ESG SummarySafe water access goalAccess to clean,safe water is a fundamental human right and essential for health,well-being,dignity and economic mobility.In this era of COVID-19,safe water access is more important than ever.Weve established strong partnerships with leading NGOs to drive watershed replenishment efforts,and last year alone we replenished more than 6.1 billion liters of water into local watersheds.PepsiCo and the PepsiCo Foundation are already more than halfway to our goal of delivering safe water access to 100 million people by 2030.Reach 100 million people with safe water access12030 Goal100 million20202021201820172016201968 M55 M44 M22 M16 M11 M1 Metric counts the cumulative number of people provided with access to safe water since 2006.Goal increased to 100 million by 2030,having achieved more than 50 million in 2020.This metric was previously reported in our Water section.Injury-free work environment goalWe are committed to respecting human rights and driving fair and safe working conditions throughout our value chain,including maintaining high safety standards and targeting an injury-free work environment.Continue to strive for an injury-free work environment12020202120182017201620192.4821.9922.2822.442.492.81Lost Time Incident Rate(LTIR)per million hours worked1 Progress showcases Lost Time Incident Rate(LTIR)per million hours worked.While this metric is new to our pep agenda,metric has been previously reported on our Environment,Health and Safety page on ESG Topics A-Z.2 2021 and 2020 results reflect the exclusion of SodaStream and Pioneer Foods.2019 results reflect the exclusion of SodaStream.Human rights goalWe recognize that success can only be achieved when all our stakeholders including farmers and growers,factory workers and community partners are treated with dignity and respect.PepsiCo is committed to respecting the rights of all workers and communities throughout our value chain.To help ensure we are in the best position to prevent,identify and address potential impacts,we established a global human rights approach that is guided by the United Nations Guiding Principles on Business and Human Rights(UNGPs).As part of this approach,we focus our efforts on our most salient human rights issues those at risk of the most severe negative impacts through our company activities and business relationships.We identified vulnerable worker groups including migrant workers,women,young workers and temporary/contract workers as a salient issue for our value chain and are taking action to address the human rights impacts faced by these groups.For instance,we recently joined the Leadership Group for Responsible Recruitment,a collaboration between leading companies and expert organizations to drive positive change in the way migrant workers are recruited.Through our engagement,we are collaborating with other global brands to embed the Employer Pays Principle and advocate for improved protections for migrant workers throughout the value chain.Promote fair and safe working conditions for all by advancing respect for human rights everywhere we operate and throughout our business activities1Our actions include:Revising our Global Human Rights Policy to strengthen our expectations and reflect emerging best practices in several areas,including our salient human rights issues Piloting a new remote worker voice initiative with over 500 workers to gain insight into potential risks in our direct operations,and planning to further scale this initiative within other operations in 2022 Continuing to expand our Sustainable Sourcing Program to additional segments of our external value chain(e.g.,contract labor providers)and evaluating additional areas for expansion in 2022(e.g.,transportation and logistics)1 In late 2021,we initiated a strategic review of our salient human rights issues to ensure we are focusing on the rights at risk of the most severe impacts throughout our value chain.We anticipate concluding this review and providing a more detailed update in late 2022.Positive Value Chain:People62021 PepsiCo ESG SummaryFood security goalThroughout the world,communities with better nutrition are more likely to flourish.Children are better educated,economies grow and people live healthier,better lives.PepsiCo and the PepsiCo Foundation are working to make nutritious food more accessible for underserved communities around the globe with a goal of providing nutritious food to 50 million people by 2030(against a 2021 baseline),and providing safe water access to 100 million people(against a 2006 baseline).Partner with communities to advance food security and make nutritious food accessible to 50 million people1202154 million02030 Goal50 million1 Initial target setting for this metric did not include Pioneer Foods,which delivered accessibility for over 20 million people in 2021.Goal introduced with launch of pep in 2021.Progress results include programs funded by the PepsiCo Foundation that are intended to provide nutritious meals,utilizing external standards established by the Global Alliance for Improved Nutrition(GAIN)and the Food and Agriculture Organization of the United States(FAO).Explore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the people-related links below.Diversity,equity and inclusion Environment,health and safety Gender parity Human rights Pay equity Supplier diversity Sustainable sourcing Read our latest sustainability and community impact stories For over a decade weve been partnering with leading organizations to increase access to nutritious food for children and their families around the world through Food for Good,our global commitment to advance food security in communities where we live and work.These collaborative efforts and investments range from short-term food access to long-term solutions to hunger.We partnered with the U.S.Department of Agriculture,the Baylor University Collaborative on Hunger and Poverty(BCHP)and Food for Good to ship millions of meals directly to the doorsteps of displaced children in rural communities.Meal boxes delivered by postal workers provided two weeks worth of shelf-stable,individually packaged nutritious food that met USDAs summer food requirements.pep pillarsAt PepsiCo,were making it easier for consumers to choose great-tasting beverages and convenient foods that are better for themselves and better for the planet.We can have a positive influence on the diets of people around the world by providing delicious products that deliver important nutrients across food groups,and are trusted to meet high safety and quality standards.We currently offer food products with whole grains,nuts,seeds,fruits and vegetables as well as complementary beverage options like water and unsweetened tea,which support hydration without adding calories.Nutritious offerings are vital to our business,and were continuously renovating and expanding our portfolio to provide consumers with great-tasting products that provide positive ingredients.Were inspiring people through our brands to make choices that create more smiles for them and the planet.Positive ChoicesWhile were improving the nutritional profile of many of our products by reducing added sugars,sodium and saturated fat,we are also investing in innovation to deliver important food groups and nutrients to encourage a balanced diet,accelerating a journey we began decades ago.Were rethinking packaging serving sizes,developing innovative packaging solutions to reduce our carbon footprint and avoid waste,working to provide simple,clear information on our packaging and exploring ways to empower consumers with transparent environmental labeling on our key products by 2030.Our most iconic brands are leading the way to drive positive change,leveraging their scale and global popularity to inspire people to make positive choices for our communities and our planet.12021 PepsiCo ESG SummaryOur portfolio advancementsWeve enhanced our portfolio through a combination of reformulation,new product innovations and the acquisition of new brands.Positive Choices:Expanded portfolio offeringsWere improving the nutritional profile of our convenient food products with more whole grains,nuts,seeds,fruits and vegetables to deliver fiber,plant-based proteins,vitamins and minerals.Weve made significant progress on reducing added sugars in our beverages and reducing sodium and saturated fats in our convenient foods portfolio so that people can continue to enjoy our most-loved brands as part of a healthy and balanced diet.Clear and prominent labeling makes it easy to understand the calorie and nutritional content of foods and beverages,empowering consumers to make more informed and positive choices.PepsiCo Positive Choices prioritize nutrition and the planetA marinated and slow roasted plant-based snackBeyond Meat Jerky10g of protein(13%DV)100%plant-basedCommitted to requiring less land,water and natural resources to produce than animal agricultureDiverse ingredients including peas and mung beans without GMOs,soy gluten or cholesterolLowcalories(10-20 per can)Sparkling water beverage with a splash of juice and functional ingredientsLowcalories(10-20 per can)Lift flavor variety with 200mg of panax ginseng to help support mental staminaRecyclable canEase flavor variety with 200mg of L-theanine to help support relaxationA variation on our popular sports drink that helps muscles rebuildGatorade Zero with proteinRecyclable bottleElectrolytes to help replenish what you lose in sweat Zerosugar10g whey protein to help kickstart recoveryAllows you to create your own bubly sparkling water at homeSodaStream bubly dropsZerocaloriesZerosweetenersHelps minimizesingle-use plastic pollutionPositive Choices:Expanded portfolio offerings22021 PepsiCo ESG SummaryGoals&progressExpand our portfolio to provide more consumer choice with products that are better for planet or peopleContinue to provide consumers choice for every occasion by expanding our product offerings by 2025:Diverse ingredients goalSugar reduction goalSodium reduction goal1 Our global progress is based on our Top 26 beverage markets,which represent 79%of our global beverages volume as of 20212 As of 2016,Top 10 markets represented 63%of beverages volume and 79%of convenient foods volume3 As of 2017,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 90%of our global convenient foods volume4 As of 2018,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 89%of our global convenient foods volume5 As of 2019,Top 26 Beverage markets represented 79%of our global beverages volume and Top 23 Convenient Foods markets represented 90%of our global convenient foods volume6 As of 2020,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 88%of our global convenient foods volume.Results reflect exclusion of Be&Cheery portfolio.7 Our global progress is based on our Top 23 convenient foods markets,which represent 86%of our global convenient foods volume as of 2021.Use more diverse ingredients that are better for the planet or deliver nutritional benefits:including legumes,whole grains,plant-based proteins,fruits&vegetables,nuts&seedsWe are purposely incorporating more diverse ingredients in both new and existing products that are better for the planet and deliver nutritional benefits.We are prioritizing chickpeas,plant-based proteins and whole grains,and expanding our position in the nuts and seeds category.In 2021,PepsiCo and Beyond Meats Planet Partnership debuted Beyond Meat Jerky,the joint ventures first product.2025 Goal20202021201820172016201953GT4D0$048%6Reduce added sugars:67%of beverage portfolio volume will have 100 Calories from added sugars per 12oz.serving1 67%reduction2025 Goal202020212018201720162019661U8E4%664%6 75%reductionReduce sodium:75%of convenient foods portfolio volume will not exceed 1.3 milligrams of sodiumper Calorie7Positive Choices:Expanded portfolio offerings32021 PepsiCo ESG SummarySaturated fats reduction goalApproachAs we strive to offer consumers more Positive Choices for every occasion,were expanding our product line to include ingredients that offer greater nutritional benefits or are better for the planet,like chickpeas and other legumes,whole grains,plant-based proteins,fruits and vegetables,nuts and seeds.We also strive to take a consistent approach to nutritional labeling throughout the world,in addition to complying with all relevant labeling laws and regulations in all markets in which our products are sold.On the front of our packaging(FOP),we are providing simplified nutrition information per portion to make it easier for consumers to quickly grasp nutrition information and make informed purchasing decisions.2025 Goal20202021201820172016201962V6&161G1g5%8 75%reductionReduce saturated fats:75%of convenient foods portfolio volume will not exceed 1.1 grams of saturated fat per 100 Calories72 As of 2016,Top 10 markets represented 63%of beverages volume and 79%of convenient foods volume3 As of 2017,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 90%of our global convenient foods volume4 As of 2018,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 89%of our global convenient foods volume5 As of 2019,Top 26 Beverage markets represented 79%of our global beverages volume and Top 23 Convenient Foods markets represented 90%of our global convenient foods volume6 As of 2020,Top 26 Beverage markets represented 80%of our global beverages volume and Top 23 Convenient Foods markets represented 88%of our global convenient foods volume.Results reflect exclusion of Be&Cheery portfolio.7 Our global progress is based on our Top 23 convenient foods markets,which represent 86%of our global convenient foods volume as of 2021.8 Results reflect exclusion of Be&Cheery portfolio.global markets sold Pepsi ZeroSugar/MAX/Black in 2021118global markets sold our Frito-Lay lineof Baked products in 202131Explore these topics in more depthPepsiCos ESG Topics A-Z resource provides detail on strategy,data,policy,progress and more on a wide range of subjects.Click on the expanded portfolio-related links below.Nutrition Saturated fat Sodium Sugar Trans fat 12021 PepsiCo ESG SummaryPepsiCo is reinventing how packaging is made and offering consumers more sustainable packaging solutions.Positive Choices:Innovative packaging solutionsWere transforming our product portfolio to use materials that prioritize the environment and deliver high-quality beverages and convenient foods without the need for single-use packaging.Our efforts focus on reducing the environmental impact of our packaging by developing plastics from non-food,plant-based sources and exploring biodegradable or compostable options.Were also developing new business models and solutions that reduce packaging,such as drink powders and concentrates,and extending the reach of innovative reuse solutions like SodaStream and SodaStream Professional.Our packaging innovationsPepsiCo is developing ways to reduce our carbon footprint and avoid waste by reinventing our packaging.Scale reuse and refill offeringsSodaStream Professional Away-from-home hydration station makes customized waterGatorade powders Drink mix to create large volumes without bottlebubly drops Seltzer flavoring to use with SodaStreamReinvent packaging materials and solutionsOff The Eaten Path Commercially compostable chips bags through TerraCyclePulpex Worlds first fully recyclable paper bottlePositive Choices:Innovative packaging solutions22021 PepsiCo ESG SummaryGoals&progressDevelop and deploy disruptive sustainable packaging materials and new models for convenient foods and beveragesSustainable beverage packaging goalApproachWere designing our packaging to minimize the use of unsustainable materials,switching to alternative materials that prioritize the environment,and reinventing packaging to reduce the need for single-use plastics through reusable or low-or no-packaging models.We intend to set a new quantifiable goal to reduce our use of single-use packaging for a percent of volume of our beverage portfolio by the end of 2022.We work with external partners to develop more sustainable packaging solutions.Were working to scale biodegradable film resins for next-generation convenient foods packaging,and with our supply chain providers to scale compostable,renewable,bio-and paper-based and reusable packaging solutions.In partnership with the packaging technology company Pulpex Limited,we are working to develop the worlds first sustainably sourced,fully recyclable paper bottle,made from wood pulp,and our Frito-Lay brand launched commercially compostable packaging made primarily from non-food,plant-based sources for its Off The Eaten Path Veggie Crisps snacks line.We continue to expand our portfolio of Beyond the Bottle beverages.SodaStream is bringing PepsiCo flavor options such as Pepsi Zero Sugar,Lipton and bubly and SodaStream Professional to additional markets by end of 2022.Our SodaStream Professional business is a mobile-enabled platform that allows people to customize their water away from home,including at offices,colleges and airports,with reusable bottles.SodaStream plans to switch all its flavors from virgin plastic to alternative materials including metal and rPET,which is expected to eliminate the need for nearly 200 million virgin plastic bottles by 2025 in addition to the more than 200 billion plastic bottles the brand is expected to help consumers avoid by 2030.In our convenient foods business,we are investing in breakthrough food packaging technology and business models that offer new ways to deliver our convenient foods,including refill-on-the-go bulk dispensing models.For example,in 2020,in partnership with UK retailer,Asda,we launched a trial to reduce plastics and explore refillable options in their Sustainability Store.Beverages:SodaStream/SodaStream Professional,powders,bio-and paper-based packaging Our actions include:Launch of Gatorade sachets in Australia,allowing consumers to use their own reusable water bottles Transitioning of brands like Pepsi Zero Sugar,Mtn Dew and Aquafina to 100%recycled PET in various marketsSustainable foods packaging goalBy year end 2022,we intend to set a new target to expand alternative business models,including reusable and refillable bottles or containers,beverages that utilize concentrates such as fountain drinks,prepare-at-home beverages(e.g.,SodaStream)or beverages sold in powder or drop form.Convenient Foods:b
2022-11-25
58页
5星级
定义了公司关注的重要问题(“重要性”)，目的是满足各种利益相关者的期望，并为创造一个人们的愿望可以实现的未来做出贡献，正如我们的公司使命所设定的那样。封面上的图片主要代表了今年报告“我们的故事”页中概述的三井物质性。
2022-10-28
126页
5星级
点击标签进入每个分类的首页分类标签导航按钮链接按钮攻击网站转发一页退回一页返回先前浏览的页面链接到相关信息封面:Mitsui&Co定义了公司关注的重要问题(重要性)，目的是满足各种利益相关者的期望，并为创造一个人们的愿望可以实现的未来做出贡献，正如我们的公司使命所设定的那样。
2022-10-28
88页
5星级
2021年可持续发展报告主要涵盖我们在2020年4月至2021年3月期间实施的举措(截至2021年3月的财政年度，3 /2021财政年度)，以及截至2021年8月期间实施的部分政策和举措(截至2022年3月的财政年度，3 /2022财政年度)。
2022-10-28
294页
5星级
与此同时，在“战略重点”和“2017财年活动”中，我们列举了我们如何为社会问题提供解决方案的新价值的明确例子。我们还将联合国可持续发展目标(SDGs)作为全球标准语言，并在“2017财年促进可持续发展目标的活动”一节中报告了我们的各种与物资相关的活动。在我们的网站上，我们专注于确保与可持续性相关的信息的方便浏览和搜索，我们已经发布了我们的ESG数据，以及GRI指南对比图表。
2022-10-28
95页
5星级
在气候变化方面，三井成为第一家将实现净零排放作为2050年愿景的综合商社。作为实现这一目标路线图的一部分，我们的目标是在2030年愿景下，将温室气体影响在2020年水平上减半。我们还引入了内部碳定价系统，以增强温室气体排放高的业务的中长期抵御能力。我们一直把尊重人权作为三井公司的基本价值。集团行为准则。
2022-10-28
14页
5星级
我们的愿景:我们渴望成为一个优秀的公司，将持续102年。公司简介我们的使命:让您在任何地方都能轻松做生意。我们的创始人创立我们的公司是为了支持小企业，他们相信互联网会创造一个公平的竞争环境，使小企业能够利用创新和技术，在国内和全球经济中更有效地成长和竞争。我们相信，无论客户是消费者、商家还是企业，关注客户需求，解决客户问题，最终都会为我们的业务带来最好的结果。
2022-09-09
110页
5星级
报告边界考虑到SK公司的控制及其对重大问题发生的影响，本报告在定量和定性报告的关键边界方面符合韩国国际财务报告标准(K-IFRS)。ESG管理和社会价值活动是追求SK DBL(双底线)的基础，包括以SK SUPEX理事会20个成员公司为基础的集团层面的定性业绩报告。此外，主要的ESG和财务成果是在合并的基础上披露的，包括上市子公司-主要是SK创新，SK电信，SK网络和SKC，占总营收的80.3%。
2022-09-01
192页
5星级
作为一家以目标为导向的公司，我们继续深化对社区和环境的承诺。我们相信，我们在环境、社会和治理方面的努力不仅是正确的事情，而且与长期价值创造和业务成功直接相关。在2022财年，我们做出了重大承诺，以促进供应商多样性，扩大我们的百思买青少年科技中心项目，减少我们的碳足迹。你可以在以下网页看到我们各项措施的详情。
2022-08-17
104页
5星级
因此，我们努力通过提供帮助人们生活的产品，并在活动中不断关注环境和安全，为更多的利益相关者带来快乐，成为“社会希望存在的公司”。
2022-07-26
190页
5星级
2020 Global Citizenship&Sustainability ReportDEAR STAKEHOLDERS,The global COVID-19 pandemic and acceleration of the movement to end racial injustice in America and around the world have powerfully highlighted business interconnectivity and responsibility to its teams,communities,consumers,partners and investors.At Ralph Lauren,we are challenging ourselves to re-examine how we deliver on our Purpose to inspire the dream of a better life through authenticity and timeless style in a way that continues to create value for all of these stakeholders.Within this context,and as we mark one year since the launch of our Design the Change strategy,we recognize the importance of staying true to the values that define us,while embracing the opportunity to listen,to engage and to evolve.Our mission is to create a positive impact on society and a more sustainable future.We made some notable progress this year from achieving gender parity in our leadership positions,to setting science-based targets to reduce emissions across the Company and value chain by 30 percent by 2030.However,in this profound inflection point in human history,our mission takes on new meaning,and we recognize that there is greater,deeper work ahead.As we continue our journey,we will take from this time both lessons and inspiration and weave them into the spirit of optimism,togetherness and caring that are at the heart of our beliefs things that are beautiful,that last and that give us hope.A MessageFrom Our Chairman&Our CEOPatrice LouvetRalph LaurenRalph LaurenExecutive Chairman and Chief Creative Officer Patrice LouvetPresident and Chief Executive Officer 2GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OVERVIEWGlobal Citizenship&Sustainability at Ralph LaurenFor more than 50 years,Ralph Lauren has inspired the dream of a better life through authenticityand timeless style,and we approach citizenship&sustainability with this in mind.Thiscore purpose informs our every day at Ralph Lauren and extends across our entire business.It isinextricably linked to how we create a better future for our Company,the people we come intocontact with and the world.One year ago,we launched our renewed citizenship and sustainability strategy,Design the Change.Our strategy was built on the values and purpose that have defined our business for more than half a century,and it is based on our belief that,together with our industry,we can deliver the change required to create a positive impact in society and a more sustainable future.When we set out on our journey to Design the Change,we set ambitious goals and dedicated ourselves to integrating our strategy into every part of our business with a clear focus on three pillars:Creating Timeless Style,Protecting the Environment and Championing Better Lives.We are one year into our journey and while we,along with the world,face an unprecedented challenge and global crisis,we are optimistic about the future and are committed to doing what we can to create a better tomorrow.Introduction“Our Company is built on not what we did yesterday or even today,but what we dream of for tomorrow.”3GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OVERVIEWDESIGN THE CHANGE Design the Change accelerates our work across Global Citizenship&Sustainability.Fundamentally,we believe that,together with our industry,we can deliver the change required to create a positive impact in society and a more sustainable future.In June 2020,Ralph Lauren signed onto the United Nations Global Compact,joining other companies across industries committed to implementing universal sustainability principles.Through Design the Change we:Create Timeless Style:We believe one of our greatest commitments to sustainability is designing products worn and loved and made to last.We are committed to responsible sourcing and using state-of-the-art materials that allow us to create our products more sustainably,without compromising the quality were known for.Protect the Environment:Were using partnerships and technology to reduce the environmental impact of our operations and supply chain across energy,emissions,water and waste.We believe collaboration is key to finding solutions,which is why we joined leading groups and support nonprofits dedicated to mitigating the environmental impacts of business.Champion Better Lives:We aim to positively affect the lives of those touched by our business,including people in our communities,workforce and supply chain.“We are proud of the progress we have made since the launch of our Design the Change strategy last year and will continue to deepen our work,building on our strategies with clear targets and credible partnerships to effect meaningful change in our business and the wider world.”4GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OVERVIEWSet science-based greenhouse gas reduction targets for our operations and supply chain by 202030 percent reduction in absolute Scope 1,2 and 3 greenhouse gas emissions by 2030 compared to a FY20 baselineSet a 100 percent renewable energy goal for our owned and operated facilities by 2019Power our owned and operated offices,distribution centers and stores with 100 percent renewable electricity by 2025Achieve at least a 20 percent reduction in total water use across our operations and value chain by 2025Achieve zero waste to landfill across our distribution centers by 2023Achieve 100 percent of our packaging material recyclable,reusable or sustainably sourced by 2025and implement our work across each pillar.Over the last 12 months,our teams focused on building a strong program and systematic foundations needed for us to achieve our goals.The progress toward our goals is highlighted in summary below and shared in more detail throughout the report.OUR GLOBAL CITIZENSHIP&SUSTAINABILITY GOALS Each Design the Change pillar is supported by a set of goals to drive our progress in citizenship and sustainability.Integration of Design the Change into our business is key to our success.Since the launch of our strategy,we have established internal cross-functional working groups to define CREATE TIMELESS STYLEPROTECT THE ENVIRONMENT CHAMPION BETTER LIVESAll of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally aware design by 2020Achieve 100 percent sustainably sourced key materials by 2025Achieve 100 percent certified or traceable animal-derived materialsas covered in our animal welfare policyby 2025Eliminate the use of hazardous chemicals in our supply chain by 2025Increase volunteer hours 25 percent compared to a FY18 baseline by 2025Achieve gender parity with equal representation in leadership positions at the VP level and above by 2023Increase female representation in factory management by 25 percent by 2025Make empowerment and life-skills programs available to 250,000 workers across our supply chain by 2030Roll out our Wage Management Strategy to all of our strategic and key suppliers to address fair and timely compensation for factory workers by 2023NEWNEW5GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OVERVIEWON TRACKON TRACKON TRACKON TRACKACHIEVEDON TRACKACHIEVEDON TRACKON TRACKON TRACKON TRACKACHIEVEDON TRACKON TRACKON TRACKACHIEVEDMateriality and Stakeholder EngagementIn FY19,we conducted a materiality assessment to help identify and prioritize the sustainability issues,risks and opportunities that matter the most to our business and stakeholders.The assessment was conducted by a third party and included extensive engagement with internal and external stakeholders including employees,selected licensees,suppliers,partners,NGOs and consumers.Based on this assessment,we set goals for each of our priority material issues as well as selected issues in other categories.These goals are shared throughout the report.Global Citizenship&Sustainability Governance Formal governance of Global Citizenship&Sustainability at Ralph Lauren sits with our Board of Directors(the Board).The Nominating,Governance,Citizenship&Sustainability Committee(the Nominating Committee)of the Board has oversight of our environmental,social,and governance(ESG)risks and opportunities.The Nominating Committee receives quarterly updates,reviews initiatives,goals and policies and makes recommendations to the Board on ESG matters.Each quarterly update to the Nominating Committee also includes a deep dive on an ESG topic,allowing the members to bring their expertise to the subject at hand.The Finance Committee of the Board and the Nominating Committee advise on the incorporation of goals into our corporate strategy and engagement on those business initiatives that influence corporate citizenship and sustainability.The Audit Committee of the Board reviews ESG risks as part of its overall Enterprise Risk Management review.The full Board receives a report on citizenship and sustainability progress at least once annually and reviews the Companys annual Global Citizenship&Sustainability Report.To further drive Company engagement,our Global Citizenship&Sustainability Senior Steering Committee meets monthly to prioritize and resource our approach in this area.The steering committeecomposed of leaders from across the Companyare responsible for defining,tracking and championing this work with the teams.It is chaired by our Chief Sustainability Officer,who also oversees our sustainability program.PRIORITY MATERIAL ISSUES Chemical Use&Discharge Climate Change Diversity&Inclusion Employee&Worker Health,Safety&Well-Being Raw Material Sourcing&Traceability Sustainable Product Design&Packaging Waste Management Water Stewardship6GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OVERVIEWCreate Timeless StyleOne of our greatest commitments to sustainability is creating products that are timeless and lasting.We are furthering that commitment by working toward more responsible sourcing of our materials and creating our products more sustainably,without compromising the quality were known for.78GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLEAll of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally aware designSustainable Product Design We have embarked on a transformation in how we approach product sustainability,beginning with a fundamental rethink of our mindset.Everything that goes into making our products,from ideation to materials,is open to challenge and up for innovation.As part of our Design the Change strategy,we are educating employees on the foundations of sustainable design.In FY20,we began the development of workshop content,e-learning modules and other tools to provide structured learning for our teams as they create sustainable products in tune with Ralph Laurens core attributes of timelessness,authenticity and quality.We developed the training program in collaboration with external experts and educators,focusing on foundational,raw materials and job-specific aspects of sustainable product design.Learning opportunities will be offered across five formats to maximize participation:Instructor-led training Required independent e-learning Expert guest speakers Evergreen tools and resources Experiential learning We commit to designing more sustainable products and experiences by sourcing responsibly,manufacturing efficiently and investing in innovation to advance these efforts.2020 GOALBy the end of 2020,all of our design,production and merchant teamstotaling nearly 1,000 employeeswill participate in the training.In FY21,we will expand the resource internally and continue to create new modules to remain up-to-date with relevant sustainability and citizenship issues and opportunities,as well as innovations,emerging standards and best practices.9GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLECultural Awareness We strive to create and communicate with respect and we continue to educate our teams and celebrate the cultures and influences that inspire our brands.Our designs are inspired by the world around us,including the landscapes,people and places we see each day.The breadth and reach of our brands across generations and cultures create a style that is authentic,timeless and truly personal.We take seriously our responsibility to use the inspiration that captivates our imagination in a way that is culturally aware and appropriate.As part of our sustainable design goal,we committed to training all of our design,production and merchant teams on cultural awareness.This past year,we created a custom educational program for our teams that included in-person workshops as well as remote learning modules covering Native American cultural awareness among other topics and sources of inspiration.More than 200 team members have already participated,and moving forward,the program will be expanded across additional teams,require annual re-certification,and be included in new employee onboarding.Beyond our educational program,our work in this area is driven by our Cultural Awareness Guidelines,which we update annually with new insights and reflections.In the last year,we formally established an internal council with team members that brings diverse perspectives and expertise to inform and advise on the guidelines,and ensures that cultural awareness is integrated from concept design through to marketing campaigns.Our guidelines are distributed and reviewed with all teams that have a role in creating our products and brand image,including our design,advertising and marketing departments.Our purpose-led commitment to authenticity guides our desire to ensure that the sources of our inspirations are respected and strengthened when they are represented through our brand.Our advisors,who support our work in cultural awareness,are some of the most respected Native American organizations in the U.S.:the Smithsonian National Museum of the American Indian and the Johns Hopkins Center for American Indian Health.10GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLESourcing&Traceability Our sustainability journey is a story of collaboration and shared ambition.We are forming deeper partnerships with core suppliers to solve long-standing sustainability challenges.We recognize that making a meaningful positive impact will require continuous engagement with our suppliers.As times and expectations evolve,the evaluation of the relationship and the level of engagement expand.Working with partners that share the same values and perspectives enables better results for our business,for our communities and for the environment.In FY20,we launched our new Supplier Engagement Strategy to establish and maintaincollaborative partnerships and systems that foster increased transparency and accountability.Our Supplier Engagement Strategy is built on our long-term strategic approach for value creation.Our segmentation principles and criteria are based on business execution,citizenship and sustainability,and product integrity.Business results are evaluated through measured performance as well as conversations that allow two-way feedback so we can improve together.Product Integrity is assessed and secured at various stages of our value chain operations through a robust Global Testing and Quality Assurance Program.We built long-term,mutually beneficial relationships with partners that share our values,are committed to continuous improvement and provide the best products to our consumers while protecting the environment and enhancing the lives of people who contribute to it.During FY20,we worked with our strategic and key suppliers to set social and environmental Our Supplier Engagement Strategy drives transparency and efficiency,while building partnerships to deliver mutual long-term positive impacts across our supply chain.Engaging With Our SuppliersOUR APPROACH TO SUPPLIER ENGAGEMENT Graphic adapted internally from“Five Critical Components of Supplier Relationship Management.”BravoSolution,8 Feb.2016.targets to help us make progress toward our goals and put in place performance expectations and detailed methods for data collection.To support learning and understanding,we conducted a survey with supplier partners on social and environmental issues.The evaluations,expectations and commitments are shared with our strategic and key suppliers,and actions and road maps are shared to track progress.Looking ahead,we are developing a supplier relationship management tool to distribute toour strategic and key suppliers,factories and fabric mills in 2021.The tool aims to deepen ourrelationships,secure transparency and facilitate communications.We will continue to host ourBiannual Supplier Summits to encourage open dialogue about our priorities,learnings,opportunities and challenges and how we can partner together to continue to create value and uphold our standards.By 2022,we aim for 80 percent of our business to be with strategic and key suppliers.As of FY20,that figure is at 47 percent.11GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLECottonFY20 MATERIAL USE*Across the apparel industry,more than 97 percent of the materials used are from virgin sources,which is resource-intensive to produce.As a brand with a deep history in quality and authenticity,materials have always mattered to us.Weve prioritized durability,craftsmanship and performance to create products that stand the test of time.Since setting our 2025 goals for our key raw materials(cotton,wool,cashmere,leather,viscose,polyester and down),we have continued to refine our sustainable sourcing criteria.The impacts that our raw material sourcing have on water,land use,animal welfare and labor practices are just some of the reasons this is such an important part of our Design the Change strategy.In addition to working to meet the sustainability criteria we have set for each of our key raw materials,we are continually exploring and assessing sustainable material innovations with a focus on reducing our negative impacts and scaling our positive impacts.Our raw material sourcing strategy is guided by our commitment to sustainability and ensuring visibility and influence in our supply chains through traceability efforts.In FY20,we created a sustainable raw material road map to outline the pathway to achieving our 2025 goals.We have already begun to make progress against our road map,increasing the volumes of more sustainable cotton,polyester and leather used across our brands and products.We are working to develop systems and protocols to track and measure the total volume(by weight)of sustainable materials as a portion of total raw materials sourced.Until these measures are in place,we will track our progress in terms of the number of units that use a material with a sustainability attribute.In FY20,11 percent of units met our sustainability criteria for cotton,polyester or wool.Sustainable MaterialsWe focus on integrating social,ethical and environmental factors in the process of developing and sourcing our key raw materials.100 percent of our key materials will be sustainably sourced12025 GOAL*In FY20,we expanded our assessment of raw material use from apparel to other products such as home,footwear and accessories.Material use for these categories was previously not available and therefore was not included in the material use data shared in the FY19 Global Citizenship&Sustainability Report.Percentages do not add up to 100 percent due to rounding.*Primarily includes additional materials used in our accessory and footwear products.1 We define”sustainably sourced”with specific standards and certifications for each raw material we have set goals for:cotton,wool,cashmere,leather,polyester,viscose and down.We leverage trusted,third-party standards such as the Responsible Wool and Down Standards.Although animal-derived materials only make up a small portion of our total material use(approximately 2 percent),and are primarily by-products from other industries,we remain committed to ensuring the respectful treatment and well-being of animals.Our Animal Welfare Policy guides our teams in sourcing these materials only from responsible suppliers.In FY20 we made great progress on our sustainable material goals for down,wool and cashmere,furthering the introduction of third-party animal welfare and sustainability standards.In the coming year,we will increase our use of sustainable materials through the partnerships,innovations and programs described below.100 percent of animal-derived materialsas covered in our animal welfare policywill be certified or traceable 2025 GOALWoolCashmereLeather/SkinsOtherPolyesterAnimal DerivedNylonViscoseOther*82.1%6.2%2.4%1.9%0.5%5.8%1.9%0.2%0.2%0.1GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLECOTTONBy 2025,100 percent of our cotton will be sustainably sourced,which we define as cotton that is either:from the Better Cotton Initiative(BCI),Fair Trade certified,organic,recycled,transitional or aligned to the U.S.Cotton Trust Protocol.Cotton is our primary material,accounting for 82 percent of our total material use.In FY20,13 percent of our total cotton units met our sustainable sourcing criteria,putting us on track to meet our 2025 goal.We are focused on transitioning our core products,such as polos,knits,chinos and shirts,to sustainably sourced cotton first.In FY20,41 percent of these core products(as measured by units)used sustainably sourced cotton.To help us sustainably source our cotton,we became members of the BCI in support of their mission to address the environmental,social and economic issues associated with growing cotton.In 2019,we sourced 6,500 tonnes of Better Cotton,which is equivalent to an estimated 8 percent of our total cotton use.2 This year,we updated our definition of sustainable cotton by replacing U.S.-grown cotton with U.S.Cotton Trust Protocol.This change brings a needed third-party standard to cotton grown in the U.S.We also added“Fair Trade certified”to round out our definition of sustainable cotton.2 Eight percent is a percentage of our total estimated cotton lint consumption for FY20 and not based on unit estimations which are used to calculate the percent of our total units that are using more sustainable cotton.3 According to data provided by REPREVE4 This number was determined based on data provided by Primaloft and First Mile for our branded recycled polyester.For our generic GRS-certified recycled polyester,data is based on the bottle consumption conversion provided by the mill.POLYESTERBy 2025,100 percent of the polyester we source will be recycled polyester.Currently,polyester only makes up 6 percent of our total material use.As of FY20,1 percent of our polyester was recycled as we began making the transition from virgin polyester.We have incorporated recycled polyester in over 100 styles,including our Earth Polo,which is made entirely from fiber derived from postconsumer-recycled ocean-bound plastic bottles.The Earth Polo is produced in partnership with First Mile,an organization with a global mission focused on sustainability and positive social impact.First Mile works with entrepreneurs in low-income communities to collect the recyclable plastic bottles,which are then processed using unique and eco-friendly manufacturing techniques.The transition to recycled polyester is significant.It uses 45 percent less energy and emits 30 percent less carbon dioxide compared to virgin polyester.3 The introduction of recycled polyester into our materials use is part of our commitment to use 170 million recycled plastic bottles in our products and packaging by 2025.In FY20 alone,we repurposed more than 20 million recycled bottles.4In FY20 alone,we repurposed more than 20 million recycled bottlesIn FY20,13 percent of our total cotton units met our sustainable sourcing criteria,putting us on track to meet our 2025 goal13GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLENYLONWe have focused on transitioning to recycled nylon for shells and other fabrics that are 100 percent nylon.Most of our Polo outerwear styles use recycled materials.In select RLX outerwear styles,we have started adopting Econyla 100 percent regenerated nylon made from pre-and post-consumer waste like fishing nets,industrial plastic waste and fabric scraps.VISCOSEBy 2025,100 percent of our viscose will be sustainably sourced and verified through CanopyStyle audits.The sourcing of viscose,a plant-derived fiber,has been connected to the deforestation of ancient and endangered forests.We stand with many industry peers and have communicated our expectation to suppliers that any viscose used in our products does not contribute to deforestation.We recently formalized our commitment to sustainably sourcing viscose with the publication of our Forest Protection Policy.Ralph Lauren is committed to achieving the highest level of transparency and sustainability within its viscose supply chain.Beginning in FY21,Ralph Lauren will be asking suppliers to provide information on the origin of cellulosic fibers to evaluate the associated sourcing risk.We will also ask suppliers to put in place their own sourcing policies which commit them to not source fibers from ancient and endangered forests or controversial sources.Finally,we will partner with suppliers to confirm the status of our viscose supply chain and use the results of the CanopyStyle audit to create a roadmap to achieve our 2025 goal,including prioritizing the use of the highest-ranked fiber producers as published in Canopys annual Hot Button Report.LEATHERBy 2025,100 percent of our leather will be sourced from Leather Working Group(LWG)-certified tanneries,with the aim that all tanneries achieve LWG Gold certification by 2030.To achieve gold certification,our tanneries must rank in the highest bracket across critical sustainability issues such as restricted substances and water use.As of FY20,43 percent of our leather suppliers are certified by LWG(gold,silver or bronze rating),accounting for 90 percent of our total leather use.While our current sustainable leather goal is focused on tanneries,our long-term ambition is to trace our leather back to the farm to verify their animal welfare practices and impacts on land use,specifically deforestation.Through our membership in the Textile Exchange,we are supporting the burgeoning work of the Leather Impact Accelerator,a program dedicated to aligning members of the leather value chain to achieve meaningful sustainable impacts.This approach aligns with our commitment to the G7 Fashion Pact,which aims to reduce the environmental impact of the apparel industry,including a focus on stopping the decline of biodiversity.In select RLX outerwear styles,we have started adopting Econyla 100 percent regenerated nylon made from pre-and post-consumer waste14GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLEDOWN Currently,all of the down we source for products manufactured by Ralph Lauren suppliers is certified by the Responsible Down Standard(RDS)or the Traceable Down Standard(TDS).WOOL By 2025,all of our wool will either be recycled or certified by the Responsible Wool Standard(RWS).In FY20,we continued incorporating recycled and RWS-certified wool into selected products.We also actively engaged with our suppliers to better understand the barriers associated with sourcing RWS wool in various geographies,with the aim of increasing the availability of this wool in the future.We are also exploring the use of other certified wools,such as Nativa and Cradle to Cradle,that meet RWS standards for animal welfare and take additional social and environmental impacts into consideration.CASHMERE We aim to make sustainable cashmere more readily available in our supply chain.In FY20,we made progress toward transparency by beginning to map the countries of origin for our cashmere.We are also engaging with the Sustainable Fibre Alliance and the Textile Exchanges Responsible Cashmere Round Table to identify the best avenues to advance the development and adoption of existing standards.We are also working to incorporate recycled and Cradle to Cradle-certified cashmere into our products.All of the down we source for products manufactured by Ralph Lauren suppliers is certified by the Responsible Down Standard or the Traceable Down StandardIn FY20,we made significant progress in using alternative down from recycled materials.We became the first brand to incorporate a Primaloft down alternativeThermoPlume into our products.ThermoPlume is made entirely from recycled plastic bottles and provides the same quality and function as conventional down.As of FY20,ThermoPlume was incorporated into our Ralph Lauren packable down outerwear.15GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLEEliminate the use of hazardous chemicals in our supply chain Chemical Management We will monitor and reduce hazardous chemical use and discharge,ultimately eliminating all hazardous chemicals from the manufacture of our products.2025 GOALModern textile production relies on chemicalsour mission is to identify the safest substances for people and the environment.Guided by our Sustainable Chemical Management Policy,no chemical will be overlookedif its a cause for concern,we seek a safer option.Responsible chemical management is key to meeting our social and environmental supply chain standards,and we believe broad industry collaboration is required to achieve widespread implementation.In FY20,we joined the Zero Discharge of Hazardous Chemicals(ZDHC)Programme as Friends of ZDHC.The ZDHC Programme is a collaborative group of contributors and stakeholders in the textile and leather industry that work collectively to eliminate the usage and discharge of hazardous chemicals from the supply chain.We are adopting ZDHC standards and tools to guide the way our supply chain selects,purchases and manages chemicals.This approach will help reduce supplier assessment fatigue and maximize the implementation efforts.We also partnered with the Apparel Impact Institute and five of our largest fabric mills to implement the Mill/impact Initiative.Through this program,the mills will have access to expert guidance in identifying and implementing measures to enhance on-site energy and water efficiency,as well as chemical management practices.In FY20,we adopted the ZDHC manufacturing restricted substances list(MRSL)and began communicating to our suppliers through our vendor compliance program.The MRSL is key to enabling suppliers to track and report on all chemicals used in the development and manufacturing of our products as well as prioritize harmful chemicals for removal.In FY20,we identified perfluorocarbons(PFCs)for removal from our garments.PFCs are used in apparel production to create high-performance water-repellant materialsbut if not managed correctly,could lead to adverse impacts on people and the environment.In FY20,we began a pilot program to explore phasing out PFCs across all Ralph Lauren brands.While it remains an industry challenge to achieve full visibility of chemical usage throughout the supply chain,we are working with our suppliers toward this objective.We are prioritizing our chemical transparency initiative with strategic and key suppliers,which made up 47 percent of our production in FY20.As we progress toward our 2025 goal,we set an interim objective with our strategic and key suppliers to achieve full chemical transparency by the end of 2020.We also identified a chemical inventory management tool to help suppliers track and directly report the chemicals used in production against the ZDHC MRSL.We will begin rolling this tool out to our strategic,selected key suppliers and fabric mills next year.SUSTAINABLE DENIM In addition to our goal to source sustainable cotton for all of our denim,discussed on page 12,in FY20,we began our transition to sustainable denim production across our global facilities.Key initiatives include:Reducing our use of potassium permanganate in all of our denim laundries,with the goal of reaching zero Increasing laser technology applications to replace manual sanding in selected facilities Replacing the use of pumice stones with alternative abrasives including synthetic stones or switching to enzyme processes for our core denim washes,with the goal of eliminating pumice stones by 2025Were using partnerships and innovative technology to reduce the environmental impact of our operations and supply chain across energy,emissions,water and waste.Protect the Environment1617GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTOur Carbon StrategyCarbon and EnergyRalph Lauren is supporting a wave of change in our industry,taking action to reduce the climate impact of our business and our value chain.There is a consensus amongst industry leaderswe must move quickly and collaboratively to decarbonize the fashion sector,which is responsible for 10 percent of global greenhouse gas(GHG)emissions.We are working with coalition groups and industry experts to reduce our carbon footprint.We are signatories to the We Are Still In declaration and the UN Fashion Industry Charter for Climate Action,pledging to limit our emissions in line with the Paris Agreement goals.We are also members of the G7 Fashion Pact,a group of fashion leaders working to stop global warming,restore biodiversity and protect the oceans.As part of our carbon reduction strategy,we joined RE100 and committed to the goal of powering our owned and operated offices,distribution centers and stores with 100 percent renewable electricity by 2025.GHG REDUCTION GOALIn FY20,we established a science-based target to reduce our absolute GHG emissions by 30 percent by 2030,compared to 2020 levels.This target includes reducing emissions from our operations(Scope 1 and 2)by sourcing 100 percent renewable electricity and reducing emissions from our supply chain(Scope 3).We commit to addressing the issue of global climate change and the contributing impacts of our business by reducing greenhouse gas emissions across our value chain.Our goal was approved by the Science Based Targets initiative(SBTi),indicating that our ambitions align with reduction pathways to limit global temperature rise across the planet to 1.5C.By selecting FY20 as our baseline,we leveraged our most accurate carbon data and aligned our goal to SBTi guidelines.5 The goal is consistent with our commitment as a signatory to the UN Fashion Industry Charter for Climate Action and our membership in RE100.Setting a value chain carbon reduction target is a significant milestone for Ralph Lauren.We believe that companies must establish ambitious,science-based targets to ensure that society averts the disruptive effects of climate change.Our commitment represents our long-standing values,reflects the evolution of our thinking and will help decarbonize the fashion industry.We are working on a detailed plan to implement our goal by sourcing renewable energy for our operations and reducing the carbon intensity of manufacturing and production in our supply chain.Thirty percent reduction in absolute Scope 1,2 and 3 GHG emissions by 2030 compared to a FY20 baseline.As part of this goal,Ralph Lauren also commits to the goal of sourcing 100 percent renewable electricity by 2025.SCIENCE-BASED TARGET5 SBTi guidelines recommend that the most recent year is used as a baseline.18GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTOUR FOOTPRINTA comprehensive carbon footprint is the foundation for our science-based target.In FY20,we improved our methodology to ensure that our calculations are representative of our value chain and consistent year-over-year.For the first time,we expanded our footprint to include our supply chain emissions,which account for 92 percent of our total footprint,with Scope 1 and 2 accounting for the remaining 8 percent.Our Scope 1 and 2 carbon footprint consists primarily of emissions from electricity and fuels for heating and cooling the facilities in our direct operations and a smaller portion due to refrigerant emissions.In FY20,our operational energy consumption was 319,586 MWh,which resulted in 126,665 MTCO2e.The energy intensity of our owned and operated stores was 36.3 kWh/sq ft.Our Scope 3 carbon footprint consists of indirect emissions from our global supply chain.In FY20,our total Scope 3 emissions were 1,538,079 MTCO2e.In future reports,we will share progress toward our 2030 GHG reduction goal.SOURCING RENEWABLE ENERGYAround the globe,renewable energy is increasingly available and cost-competitive compared to conventional power sources.Our strategy for achieving our Scope 1 and 2 GHG reduction goal is focused primarily on renewable energy.In FY20,we joined RE100 and committed to the goal of powering our owned and operated offices,distribution centers and stores with 100 percent renewable electricity by 2025.To achieve this goal,we plan to implement virtual power purchase agreements in North America and assess our U.S.locations for onsite solar power installations.For our remaining electricity use,we plan to purchase high-quality green electricity credits,such as renewable energy certificates.As of FY20,2 percent of electricity used in our operations was from renewable sources.We expect this number to significantly increase as we put our renewable energy strategy into action.ENERGY EFFICIENCY IN STORESWe use environmental management systems to monitor and control energy-intensive building components including lighting,heating and cooling.In FY20,we opened 11 stores globally designed with LED lighting and we retrofitted the lighting in 16 existing stores to be more energy efficient.In FY21,we will retrofit the lighting at the remainder of our Polo and Ralph Lauren branded stores in North America and we are evaluating additional opportunities at our Asian and European stores.In FY20,our stores consumed 190,324 MWh and their carbon intensity was 0.014 MTCO2e/sq ft.Energy and Emissions*,*Energy Use(MWh)at our own facilities in FY20Operational Energy Use319,586Carbon Footprint(Scope 1,2 and 3)(MTCO2e)in FY20Total Emissions1,664,744Scope 1 Emissions16,248Scope 2 Emissions110,417Scope 3 Emissions1,538,079Carbon Intensity(MTCO2e/$million revenue)270.26*Due to improvements in our carbon footprinting methodology for FY20,we are unable to draw comparisons to historical data for FY18 and FY19.Our previous footprint did not account for all of our owned and operated facilities and energy use,and our carbon accounting system did not allow for easy recalculation of previous years.Therefore,we chose to use FY20 as our baseline to ensure accuracy and full inclusion of all emissions sources.Previously reported carbon data,which leveraged a different methodology,is available in the 2019 Global Citizenship&Sustainability report.*We measure and calculate our emissions according to the World Resources Institute Greenhouse Gas Protocol,the industry standard and international tool for carbon accounting.For a more detailed methodology,see our 2020 Standards Supplement.Energy in Our OperationsOur owned and operated offices,distribution centers and stores will be powered by 100 percent renewable electricity 2025 GOALIn FY20,we joined RE100 and committed to powering our owned and operated offices,distribution centers and stores with 100 percent renewable electricity by 2025.19GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTBy mapping our Scope 3 footprint,we identified priority areas for emissions reduction,including raw material manufacturing and garment finishing where the final touches are added to our products.TIER 1 SUPPLIERSWe are gathering environmental data,including energy use,from tier 1 suppliers through the Sustainable Apparel Coalition(SAC)Higg Facility Environmental Module.The data will inform how we reduce the carbon emissions associated with our supply chain.As of FY20,216 supplier facilities provided energy use and emissions data,representing an estimated 63 percent of our total supply chain spend.In FY21,we will collect data from more suppliers and create road maps to help reduce our supply chain carbon footprint,starting with our strategic and key suppliers.6 TIER 2 FABRIC MILLSIn FY20,we partnered with five of the largest fabric mills we work with to help them join the Apparel Impact Institute(AII)Mill/impact program.Building upon the Clean by Design methodology,the program provides training and resources to help suppliers reduce their carbon,water and chemical footprint.Our participating fabric mills receive on-site visits from environmental experts,consultation on goal-setting and technical support for environmental impact reduction projects.Reducing Our Supply Chain FootprintSHIPPING OUR PRODUCTSProduct transportincluding train,truck and airis included in our Scope 3 footprint.We aim to use the most efficient transportation possible to mitigate cost and environmental impact when shipping products to our distribution centers.We expect our suppliers to deliver products in the most cost-efficient and environmentally friendly way possible.Only in rare circumstances,when production does not meet delivery deadlines and we are in urgent need of that supply,do we allow vendors to deliver product via air.In FY20,vendor-managed air accounted for only 3.8 percent of total shipments,compared to 5.8 percent in FY19.In FY20,Ralph Lauren signed the Ocean Conservancy Arctic Shipping Pledge to protect the Arctic marine ecosystem from the negative impacts of commercial shipping.As a signatory,Ralph Lauren commits not to hire carriers to ship our products through Arctic Trans-Shipment Routes.We also engage with organizations such as Clean Cargo,a BSR collaboration for sustainable transportation,and the U.S.Environmental Protection Agency SmartWay program on efficient logistics.Logistics*FY19FY20Air Freight(%of shipments)5.8%3.8%*Inbound shipment from factory to global point-of-receipt6 Strategic and key suppliers are those suppliers that have a strategic relationship with Ralph Lauren aligned to our business strategy,develop business-critical products and meet our standards at a gold(strategic suppliers)and silver(key suppliers)level.In FY20,216 facilities that supply us,representing 63 percent of our supply chain spend,provided their energy use and emissions data through Higg20GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTOur Water StrategyWater StewardshipAll life depends on water,and we cant overstate the importance of our industry protecting this finite resource.We are in the process of transforming the way water is used in our supply chain,introducing the best new technologies that minimize consumption and protect the worlds water resources.As of this year,our water stewardship initiatives include:Leveraging the SAC Facility Environmental Module to capture water data from our tier 1 suppliers.Enrolling five of our tier 2 fabric mills in the Apparel Impact Institute(AII)Mill/impact program to reduce their environmental impact,including water use.Working with seven knit and woven manufacturers to minimize water use and improve effluent treatment by upgrading factory equipment.We estimate these projects helped our knit and woven partners avoid 168,000 cubic meters of water use in FY20.Manufacturing all Earth Polos with a waterless dyeing technology.Reducing the use of water-intensive chemicals in the production of core denim products.In addition,we entered into a collaboration with World Wildlife Fund to accelerate progress toward our goal of reducing our water use.In this first year of the collaboration,we are analyzing our water footprint,identifying areas of water risk,and outlining strategies to decrease our water consumption while also identifying opportunities to address water quality and access needs across our value chain.Through our partnerships with GiveMeTap and DigDeep,our water stewardship initiatives extend to our communities.Read more about our work to safeguard and preserve water in Community Engagement and Philanthropy,on page 26.We commit to reducing water consumption across our value chain,and to safeguarding and preserving water resources in our communities.Achieve at least a 20 percent reduction in total water use across our operations and value chain,compared to a FY20 baseline 2025 GOAL21GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTWaste ManagementWe commit to integrating zero waste principles across our business.We aim to divert waste from landfill through increasing recycling and upcycling,reducing waste at its source,and implementing other best practices.Toward our goal for zero waste,we are designing waste out of our processes,in our own business and throughout our supply chain.From manufacturing to distribution centers,retail operations and events,we are identifying ways to replace,improve and create processes that will eliminate waste and help us progress toward our zero waste distribution center goal,as well as our commitment to bring zero waste principles into all aspects of our business and value chain.Our approach addresses waste associated with products and our operations.Managing Excess InventoryIn FY20,we developed a set of guiding principles to support our waste management strategy.These principles were created to minimize waste,maximize the value of our products in their first and next life,keep all materials at their highest and best use and maintain the integrity of our brand throughout all of the above.To help put our principles into practice,we established a waste management hierarchy for inventory and commercial waste to guide decision-making across the organization.Prevent Excess at SourcePursue Expanded Sales ChannelsMaximize Product/Materials Next LifeDonate for Positive ImpactRecycleDisposeMost preferredLeast preferredOUR EXCESS INVENTORY MANAGEMENT PRINCIPLES22GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTEMPLOYEE ACCESSWhile we have historically held employee sales of excess inventories,access has been limited to employees in the immediate geography of the inventory.In FY21,we will begin exploring new ways to provide employees access to excess inventories and are in the process of creating a pilot digital employee sale.DONATE FOR POSITIVE IMPACTIn FY20,we made donations to a number of partners across our global networks,including Delivering Good and Material for the Arts.We donated over 40,000 units of products.Our donation strategy is focused on helping as many communities as possible where our employees and customers live and work and aligning our partnerships with nonprofits to that strategy.RECYCLETaking the learnings from a garment recycling pilot in Europe,where we recycled garments to make raw materials for insulation and soundproofing boards,we are continuing to find opportunities to recycle excess product when all other,more productive and more sustainable options have been explored.Textile recycling does have technical and product eligibility challenges,such as the inability to process blended fabrics and limited options for shoes and handbags.In FY21,we will continue to explore recycling options and partners.DISPOSITIONAfter we have exhausted the channels and avenues described above,we reserve product disposition(or destruction)as a last resort.We prioritize waste-to-energy disposal methods wherever possible.As visualized in our hierarchy on page 21,our aim is to reduce waste as much as possible through the strategies we have outlined and ultimately eliminate product disposition or destruction.As we look to the future,we will be ramping up our donation partnerships as well as exploring new recycling partners for eligible products.PREVENT EXCESS AT SOURCEIn FY20,we started to develop a global approach to reducing inventory waste and standardized the steps we take to prevent excess product from becoming waste.Accurately predicting product demand is a common challenge in our industry.As a result,in the traditional manufacturing model,production routinely exceeds demand.We envision a future where we produce only what is neededeliminating any overproduction altogether.To do this,we have taken steps over the last few years to better balance our inventory with demand.We have continued to shorten value chain lead times and implemented agile production models,while applying buying techniques that more closely match manufacturing to demand.Over the last three years,we have produced fewer units while increasing our revenue and profit margins.This success shows it is possible to maintain financial performance while minimizing overproduction.In FY20,we launched a pilot to minimize overproduction of our wholesale orders in our European market.Working together,our merchandising,sourcing and global manufacturing teams manage commitment dates to ensure that they occur after we confirm customer orders.This cut-to-sales model decreased the number of extra items made,and in FY21,we will implement the same process improvement in North America.PURSUE EXPANDED SALES CHANNELSAfter offering our products in full price omni-channel across regions,we evaluate pursuing alterantive sales channels for products that are not sold within the planned time frame,including our outlet stores and various clearance partners around the world.We are also using service-based revenue models like rental platforms,also known as shared closets.We are on platforms including Rent the Runway and Nuuly with our Polo,Lauren and Club Monaco brands.MAXIMIZE PRODUCT OR MATERIALS NEXT LIFE We have begun to expand the potential“next life”opportunities for our products by expanding our use of re-commerce and upcycling.In FY20,we launched RE/SOURCED a uniquely curated collection celebrating vintage Polo with Depop and are pursuing additional vintage and resale opportunities for FY21 and beyond.Building on our various Upcycling capsules and collaborations in the past,we are continuing to find creative ways to use products and fabrics to make new,one-of-a-kind products.23GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTOperational WasteThe teams at our distribution centers,offices and stores are focused on waste avoidance and minimization.We are analyzing our waste streams,improving signage and establishing new partnerships to avoid sending materials to incineration for energy or landfill.Achieve zero waste to landfill across our distribution centers2023 GOALOperational Waste in FY20Metric TonsDiversion RateDistribution Centers 5,50785%Stores*2,91778%Offices*1,43435%Total Operational Waste9,85875%We reduce waste at our distribution centers to drive efficiency and minimize our environmental impact.In FY20,we conducted a global assessment of waste generated at our distribution centers and calculated the baseline diversion rate across selected global sites.In FY20,we achieved 90 percent diversion at our owned distribution centers in North America.In FY21,we will work to achieve similar diversion rates in our third-party-operated distribution centers in Europe and Asia.To reach our zero-waste goal,we recycle or reuse most of the cardboard,plastic,pallets and paper material that enter our facilities.We are working to ensure that every distribution center also has a solution in place for items such as electronics and light bulbs.In FY21,at our third-party-operated distribution centers in Europe and Asia,we will focus on excess inventory diversion.In FY20,we generated 5,507 metric tons of waste at our distribution centers and diverted 4,658metric tons of waste from landfill.In FY21,we will work with our haulers to improve our distribution center diversion rate by further reducing the waste we send to landfill.One area of opportunity we plan to address is recycling or eliminating the hangers and polybags which our suppliers typically include in product shipments.Our retail stores continue to recycle to divert waste from landfill.In FY20,we were directly responsible for waste management at 86 of our retail locations,and 100 percent of our stores in North America continue to have recycling programs.Our employees want to play an active role in our sustainability program,and we are harnessing that energy in a new community groupthe Green Ponies.Formed in FY20,the Green Ponies advance environmental improvements at our offices by driving internal awareness,collecting innovative ideas and implementing solutions.*Comprehensive site-specific waste data was not available for all offices and stores.Waste data was modeled for these sites.In FY20,our distribution center diversion rate was 85 percent,on track to meet our 2023 goal24GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENTSustainable PackagingFor more than a decade,Ralph Lauren has recognized the importance of environmentally responsible packaging.Our 2025 company-wide goal is to only use recyclable,reusable or sustainably sourced packaging materials.7 As of FY19,over half of our packaging met this criterion,with the share of sustainable packaging continuing to increase in FY20.In FY20,we took several steps toward achieving our sustainable packaging goal,including formalizing our Forest Protection Policy.This policy underscores our commitment to reduce the environmental and social impacts of our packaging.During the year,we inventoried every material used in our product packaging.Our top three items by volume of usage are stickers,decorative tags,and polybagsindividual plastic bags used to protect products.Through our inventory,we identified over 250 unique items that met our sustainability criteria,including our recyclable tags,reusable shopper bags and polybags that contain 50 percent postconsumer-recycled content.We have identified 20 priority packaging materials that we will either stop using or transition to more sustainable sources.In FY20,we developed guidelines for decorative tags which will reduce nonessential tags and require that FSC-certified paper is used for tags that are not eliminated.We also worked with suppliers and other retail brands on how we can eliminate,reduce or replace polybags.In FY20,we piloted a program with selected suppliers to reduce the number of polybags used in transporting products and tested 14 alternatives to polybags including recycled content bags,biobased bags and bags with lower impact at end of life.100 percent of our packaging material will be recyclable,reusable or sustainably sourced2025 GOAL7 In FY20,we updated our goal to include reusable packaging options.Sustainably sourced includes packaging that is post consumer or post industrial recycled content or FSC certified.Customers can select a reduced packaging option for any orders placed through RalphL.For these orders we do not include plastic or paper inserts,hangers or garment bags,promotional materials and paper invoices.In FY20,we proactively removed and recycled all of the polybags from reduced packaging orders,representing 12 percent of all orders placed through RalphL that year.To make this possible,we updated our customer service website,changed our packing process and trained employees in our customer service and distribution centers on the new procedure.We are also developing a reusable shipping package pilot as part of our effort to reduce shipping packaging waste.In FY20,we identified a viable reusable packaging solution and we plan to test the concept in FY21.As of FY19,over half of our packaging was recyclable,reusable or sustainably sourced25We aim to go beyond reducing our impact to positively affecting the lives of those touched by our business,including people in our communities,workforce and supply chain.Champion Better Lives26GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESCommunity Engagement and PhilanthropyGiving Time and TalentOur employees are passionate about volunteering and fundraising in their communities,which we encourage by connecting them to inspiring opportunities.In FY20,we achieved our volunteering goal ahead of schedule due to the thousands of Ralph Lauren employees who supported their local nonprofit organizations.During the year,they donated more than 14,000 hours of their time,an increase of 50 percent compared to our FY18 baseline.As part of the Ralph Lauren Gives Back program,we host three8 dedicated volunteering weeks annually that encourage teams company-wide to give back to their communities.We also participate in community engagement activities year-round with focus events like our Pink Pony campaign,Earth Day and our Season of Giving that takes place in December.We make a meaningful difference in our communities through our global employee volunteerism and our dedication to social and environmental causes.Increase volunteer hours 25 percent compared to a FY18 baseline2025 GOAL3,72614,252244150employees participatedhours volunteeredevents attendedorganizations supportedFY20 EMPLOYEE VOLUNTEERING98 Only two dedicated volunteering weeks were held in FY20 due to COVID-19 restrictions.9 Our third volunteering week in FY20 was cancelled due to COVID-19 restrictions affecting our FY20 volunteering efforts.ACHIEVED27GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESThe Ralph Lauren Corporation(the Company)makes monetary and product donations to support local community groups.The Company also provides funding,including a portion of cause marketing proceeds,to the Ralph Lauren Corporate Foundation10(the Foundation),a distinct charitable entity established in 2001.Combined FY20 contributions from the Company and the Foundation totaled more than$7 million.11To support COVID-19 relief efforts,the Foundation donated$10 million in aid to employees,partners and communities by:Providing financial grants through the Emergency Assistance Foundation for Ralph Lauren employees facing special circumstances like medical,eldercare or childcare needs.Contributing to the World Health Organization COVID-19 Solidarity Response Fund,a global effort supporting countries to prevent,detect and respond to the pandemic.Supporting our long-standing network of international cancer institutions that care for people with cancer who were especially vulnerable during this time.Committing an inaugural gift to the Council of Fashion Designers of America(CFDA)and Vogue Fashion Fund to support the American fashion community affected by the pandemic.Partnering with the CFDA Foundation and U.S.manufacturers to donate 250,000 masks and 25,000 isolation gowns for healthcare and frontline workers.Additionally,Ralph Lauren committed around 1.5 million units of clothing,25,000 meals and other critical supplies including face masks and hand sanitizer to frontline workers and nonprofit organizations around the world.Throughout the year,the Foundation also prioritized support for cancer care and prevention,LGBTQIA equity and access to clean water.Contributions were also made to the California and Australia wildfire relief efforts by supporting the American Red Cross.Philanthropy10 Previously known as the Polo Ralph Lauren Foundation11 In FY20,the Company sold our corporate jet and donated the proceeds,approximately$21 million,to the Foundation.This donation is not reflected in our FY20 total contributions to avoid skewing the data.Combined FY20 contributions from the Company and the Foundation totaled more than$7 million28GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESCANCER CARE AND PREVENTIONFor almost 20 years,the Ralph Lauren Center for Cancer Care(RLCCC)has worked to reduce healthcare disparities in New York City by providing high-quality cancer prevention and treatment for underserved populations.In FY20,RLCCC formally joined the Memorial Sloan Kettering Cancer Center,serving vulnerable and minority populations and providing access to cancer screening,prevention and treatment services.Our global Pink Pony campaign is the cornerstone of our fight against cancer.Now in its 20th year,Pink Pony is recognized for its contribution to raising awareness,encouraging conversation and education and driving donations.In FY20,the corporation donated 100 percent of sales from our pink“Live Love”T-shirttotaling$2 millionto the Foundations Pink Pony Fund supporting cancer-fighting organizations.LGBTQIA EQUITY AND INCLUSIONSince 2003,the Foundation has proudly supported and invested in the LGBTQIA community.To further our aim of creating a culture of belonging,we partnered with the Stonewall Community Foundation.As the beneficiary of our gender-neutral Pride capsule,Stonewall received 100 percent of sales from our“Pride”T-shirt,50 percent of sales from all other capsule items and donations collected at registers for a total donation of more than$338,000 in FY20.With a global reach,Stonewall carries out its mission of strengthening the LGBTQIA movement through the deployment of targeted,values-driven investments to impactful organizations,projects and leaders.ACCESS TO CLEAN WATERThrough our partnership with GiveMeTap,we donated$37,500 in FY20 to fund drinking water projects in rural Africa by providing stainless steel water bottles to our employees across the globe.Additionally,for every Polo-branded bottle sold on RalphL,a minimum of$2 has been committed to help fund the installation of water pumps across rural Ghana.12 To date,the program has provided 13 water pumps and positively affected over 10,000 people.This year we also provided Navajo families with home water systems through our partnership with DigDeep,a nonprofit focused on increasing access to water and sanitation throughout the United States.Our cancer work benefits an international network of charities.The Ralph Lauren Corporation reinforced a long-standing partnership with The Royal Marsden Cancer Charity,dating back to 2014,by pledging 1 million by FY22.Contributions will come from product sales,in-store donations and employee fundraising events and will be used to establish a research area within the Oak Cancer Centre which is slated to open in 2022 at The Royal Marsden in Sutton,United Kingdom.12 Purchase does not affect funding.All pump funding is by GiveMeTap.Learn more at GiveMeT 29GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESDiversity and Inclusion We are committed to creating a culture where everyone has a sense of belonging and can thrive to be their best.We celebrate diverse cultures and backgrounds and aim to make everyone feel included and respected in our extended family.The diversity of our people and our culture of inclusivityfrom our retail employees to our executivesis a business advantage for Ralph Lauren.We become more innovative,creative and successful with each unique individual who joins our Company.In FY20,we updated our recruitment and retention tactics to increase the gender and ethnic diversity of our workforce.63male37%Male64male64male36%Male36%MaleAsianBlack or African AmericanHispanic or LatinoTwo or More Races3%Undeclared41%White56%All diverse talent*AsianBlack or African AmericanHispanic or LatinoTwo or More Races3%Undeclared39%White58%All diverse talent*FY1822%8%0.5%0.4%3%FY1923%8#%0.5%3%0.5%FY19FY20FY18EMPLOYEES BY GENDER(%OF TOTAL)U.S.EMPLOYEES BY ETHNICITY(%OF TOTAL)*Employees who identify with one or more diverse groupsOur FY20 global workforce was 64 percent female,consistent with our FY19 levels.Sixty percent of our FY20 U.S.workforce identified with one or more diverse groups,an increase of 2 percent compared to FY19.3%Undeclared37%White60%All diverse talent*AsianBlack or African AmericanHispanic or LatinoTwo or More RacesFY2024$%0.5%4%0.5%8%American Indian or Alaskan NativeNative Hawaiian or Pacific IslanderAmerican Indian or Alaskan NativeNative Hawaiian or Pacific IslanderAmerican Indian or Alaskan NativeNative Hawaiian or Pacific Islander30GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESIn FY20,we reached a milestone in our diversity and inclusion(D&I)journey.We achieved our 2023 gender parity goal for equal representation in leadership positions at the VP level and above three years ahead of schedule.In FY20,women held 50 percent of VP level and above positions at the Company.Moving forward,we will continue to uphold our Parity.org commitment to include women and diverse candidates in the interview process for all open VP level and above roles.We strive to increase opportunities for women in our workforce globally,and also for femalefactory workers in our supply chain.On average,women make up half of the apparel supply chain workforce,yet in many markets,the vast majority of supervisor positions are held by men.Recognizing that we can fundamentally influence the lives of women workers(and their families)by helping them achieve career progression,we are committed to increasing women in factory leadership by 25 percent by 2025.To achieve this,in FY20 we partnered with the International Finance Corporation to launch the Gender Equality and Returns(GEAR)Program to provide training to female workers on the skills needed for supervisory roles.See Worker Empowerment and Well-Being,on page 35,for more information on GEAR.Achieve gender parity with equal representation in leadership positions at the VP level and aboveIncrease women in factory leadership by 25 percent 2023 GOAL2025 GOALACHIEVEDWe achieved our 2023 gender parity goal for equal representation in leadership positions at the VP level and above three years ahead of schedule31GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESDIVERSE RECRUITMENT Our University Relations program recruits at colleges and career fairs to sustain a robust and diverse talent pipeline.In FY20,59 percent of our global new hires were female,an increase of 2 percent compared to FY19,and 68 percent of U.S.new hires identified with one or more diverse groups,an increase of 2 percent compared to FY19.We partner with nonprofits to expand opportunities for young people from marginalized or underserved communities.In FY20,we formed a partnership with SEO Scholars,a nonprofit that mentors public school students through high school and college.In FY21,we will continue to work with SEO students in mentorship opportunities organized with our D&I employee groups.Supporting DiversityU.S.NEW HIRES BY ETHNICITY(%OF TOTAL)56male44%Male57male43%Male59male41%MaleFY19FY20FY18NEW HIRES BY GENDER(%OF TOTAL)*Employees who identify with one or more diverse groupsAsianBlack or African AmericanHispanic or LatinoTwo or More Races4%Undeclared33%White62%Diverse new hires*FY1825%6&%0.5%0.5%4%AsianBlack or African AmericanHispanic or LatinoTwo or More Races4%Undeclared31%White67%Diverse new hires*FY1927%7&%1%0.5%5%AsianBlack or African AmericanHispanic or LatinoAmerican Indian or Alaskan NativeNative Hawaiian or Pacific IslanderTwo or More Races3%Undeclared29%White68%Diverse new hires*FY2029%6%0.4%0.4%5%American Indian or Alaskan NativeNative Hawaiian or Pacific IslanderAmerican Indian or Alaskan NativeNative Hawaiian or Pacific Islander32GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESATTRACTING AND RETAINING TALENTWe design our talent management initiatives to attract prospective employees and retain our valued workforce.We continue to offer early career opportunities through our paid internship program.In FY20,we enhanced our formal corporate and creative internships by extending the program to new international schools and increasing opportunities for direct placement post graduation.Gender,ethnic and socioeconomic diversity are among the criteria we use to select candidates for the program.To retain our employees,we support career mobility through development opportunities and by encouraging internal recruitment.The impact of this is most evident in our appointments to leadership roles.In FY20,78 percent of open U.S.Director-level and above positions were filled with internal candidates,consistent with our FY19 levels.Our Navigating Your Career program provides e-learning,workshops and career coaching for all employees.In FY20,we expanded the program to include networking events,career panels and open office hours with leadership.FOSTERING AN INCLUSIVE CULTURE Our Company is home to people from different backgrounds and we celebrate the varied perspectives they bring to Ralph Lauren.We are creating a culture where all employees have a sense of belonging and thriveas individuals and as a part of our team.In FY20,we joined Open to All,a national nondiscrimination coalition.By taking the Open to All pledge,we promise to maintain a safe and inclusive environment for people in our stores and offices.As a member of the CEO Action for Diversity and Inclusion group,we are committed to advancing D&I within our industry.We are contributing to a CEO Action white paper on how the apparel industry can support and engage employees on D&Ifrom concept to the shop floor.The white paper will be published and shared with CEO Action signatories in FY21.EMBEDDING DIVERSITY Working together to embed a culture of diversity and inclusion in our Company,our employee groups described below promote dialogue,help define focus areas and develop solutions.Diversity&Inclusion Synthesis Board Our CEO and leaders from regional D&I teams advance our D&I strategy.Diversity&Inclusion teams Regionally organized teams meet regularly to address the needs of local employees.Ralph Lauren Communities Ralph Lauren has five global,employee-led communities:RL Gender Parity,RL Pride,Generation RL,RL Mosaic and RL Wellness,Disability and Mental Health Community.In FY20,we hosted nearly 100 global employee events to celebrate identity and heritage in our community.Thirty of those events took place during Pride Month.We brought our Pride campaign to customers with in-store messaging and themed products that raised funding for our nonprofit partner Stonewall.In FY20,Ralph Lauren was recognized for our workplace culture:In FY20,78 percent of open U.S.Director-level and above positions were filled with internal candidatesIn FY20,we scored 100 percent on the Human Rights Campaign Corporate Equality Index,earning the designation of Best Place to Work for LGBTQ EqualityAMERICAS BEST EMPLOYERS FOR WOMEN WORLDS BEST EMPLOYERS33GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESEDUCATION AND COMMUNICATIONTraining at all levels ensures that our employees know how to contribute to a healthy and inclusive workplace culture where they feel safe and respected at work.In FY20,all global employees,including our Board members,completed unconscious bias training.In addition,all design,production and merchant teams will receive cultural awareness training by FY21.We continued to host the D&I Salons,a learning opportunity for Ralph Lauren Executive Leaders to convene with global industry and diversity experts,with FY20 content focused on gender parity in fashion.In FY21,we will expand our work with Parity.org by developing a road map for achieving gender parity in the retail and fashion industry.This will be published in a white paper and shared with industry peers who have joined our D&I Salons in the U.S.and Europe.We will also launch a new unconscious bias training in FY21 on allyship and advocacy,focusing on inclusive behaviors.WELLNESS,BENEFITS AND PAY EQUITYWe take a holistic view of well-being,attending to the physical,emotional,social and financial needs of employees and their families.Our support includes comprehensive employee resources,progressive benefits and competitive compensation.In FY20,we launched an enhanced global wellness program,THRIVE,for Ralph Lauren employees.The resources available through THRIVE vary by region and include flexible work arrangements,sabbaticals,volunteer events,exercise and mindfulness classes and educational series.We continually review and improve our benefits package to ensure that we are meeting the needs of our employees.We are committed to equal pay for equal work across our Company.We take a proactive approach to gender pay equity and continually monitor our compensation programs to ensure fairness.Our approach includes a biennial assessment with a human capital management firm to analyze employee compensation.Our FY20 assessment confirmed that our male and female employees based in the U.S.receive equal pay for equal work.In FY21,we will begin expanding the assessment to our global workforce.Ralph Lauren also publishes an annual U.K.Gender Pay Gap report,in line with U.K.legislation.Our mean and median gender pay and bonus gaps remain substantially better than U.K.average figures.GLOBAL PEOPLE PRACTICESOur Global People Practices team upholds the Companys Fair Treatment Policy,managing:Workplace Compliance ensuring that employees and vendors comply with all workplace laws,regulations,and Company policies Policies and Practices co-creating people-related policies,practices,and educating employees Progressive Work Practices evolving policies and practices to give employees flexibility on where and how they work Safe and Impartial Review handling all workplace issues in a confidential,consistent and fair mannerOur Fair Treatment Policy helps us maintain a professional and productive Ralph Lauren work environment that is free from discrimination and harassment.Anyone who is covered by the policy can raise a concern through our open door policy and the RL Global Hotline.We investigate,resolve and track concerns so we can prevent recurrence and implement proactive strategies throughout our organization.Employees must adhere to our Code of Business Conduct and Ethics as well as our anti-bribery and anti-corruption policies.We provide training on these items annually to help employees make good decisions in their day-to-day work.INVESTING IN ALL EMPLOYEES Our success depends on how capable and committed our people are,so we invest in programs that make Ralph Lauren a great place to work.We engage employees through educational opportunities and feedback mechanisms which strengthen the Company from within.Our FY20 pay equity assessment confirmed that our male and female employees based in the U.S.receive equal pay for equal work34GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESLEARNING AND DEVELOPMENT Weve expanded our learning and development program to build skills and prepare for the future.In FY20,we opened our mentorship program to all employees and launched a tuition assistance fund to support continuing education.More than 760 employees participated in mentorship,four times as many as in the prior year.In FY20,we awarded$197,000 through our new scholarship program to support employees enrolling in courses that build their professional skills.All employees can accelerate their growth through the Ralph Lauren Learning Portal and in FY20,92 percent completed a learning event through the platform.The portal is one way corporate employees can use their benefit of 10 hours of Company-sponsored learning time.In FY20,we continued to scale our mentorship cohort programs,RUNWAY,UNLOCK and BESPOKE.The 12-month,in-person learning experiences are tailored for employees at different levels of the organization.BESPOKE Available to leaders at the VP level and above,focused on developing new leadership skills RUNWAY Available to people-managers,building communication and soft skills needed to successfully manage a team UNLOCK Available to employees after one year at the Company,focused on ways to work within our culture and businessACTING ON FEEDBACK In FY20,94 percent of employees responded to our annual all employee survey.Through the survey,employees indicated that our top strengths inlcude our strong consumer focus and our culture of diversity,inclusion and respect.Employees also indicated that they feel a strong commitment and pride in the Ralph Lauren brand.The survey highlighted areas for improvement,such as increasing career advancement opportunities and decision-making responsibilities for employees in lower-level positions within the organization.Due to COVID-19,employees based in China,Hong Kong,Macau and Taiwan did not participate in the FY20 Employee Engagement survey.We will invite employees based in these countries to provide their feedback in FY21 for a total global view.93%FY19FY20FY18EMPLOYEE ENGAGEMENT SURVEY RESPONSE RATEIn FY20,more than 760 employees participated in a mentorship program,four times as many as in the prior year945GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESWorker Empowerment and Well-BeingChampioning WorkersWe are committed to conducting our global operations ethically and with respect for the dignity of all people who make our products.We aim to enrich the quality of work and life for all workers in our supply chain,ensuring that everyone has the opportunity to reach their full potential in a safe work environment.We appreciate and value the talent and commitment of nearly half a million factory workers in our supply chain who make the timeless style and quality of Ralph Lauren pieces a reality.We believe our efforts to enhance the lives of workers must embody,protect and promote universally accepted human rights,freedoms and norms.We continuously refine our supply chain over decades to deliver the technology,flexibility and quality we require while respecting worker rights.During FY20,519 factories manufactured for us in 40 countries.These factories in turn received materials from tier 2 suppliers,such as textiles from mills and dye plants.As part of our Supplier Engagement Strategy,we maintain long-standing relationships with our strategic and key suppliers,enabling us to partner closely and transparently for the benefit of the people who make our garments.51940113Active factories CountriesNew factories onboarded in FY20SUPPLY CHAIN OVERVIEW(FY20)FACTORIES PER GEOGRAPHIC LOCATIONS36GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESWe take our responsibility for ensuring a safe and healthy working environment very seriously and continually conduct our business according to high ethical and legal standards.Our Operating Standards are the basis for our relationship with suppliers,communicating our standards across legal and ethical matters,labor,animal welfare and environmental compliance.We regularly review and update the Standards to make sure they are current with emerging issues and expectations.Our Standards are available in 42 languages and must be displayed prominently in factory areas where workers congregate and in the languages understood by the workers.In FY20,we strengthened our Operating Standards to require factories to have formal grievance mechanisms in place.All new suppliers must meet our standards before they receive an order from us.If we find a supplier in violation of our standards,they must adequately remediate the issue before any production orders are placed.We ensure that suppliers maintain compliance with our program of auditing,remediation,monitoring,supplier engagement and capability building.BETTER LIFE PROGRAMSIn addition to ensuring compliance with our Operating Standards,we are also coordinating with factories to improve the overall well-being and career progression of workers through our Better Life programs.We aim to make these empowerment and life-skills programs available to 250,000 workers across our supply chain by 2030.EMPOWERING WOMEN In FY20,we continued our work with BSRs(Business for Social Responsibility)HERproject in Bangladesh sponsoring the HERhealth program.The program provides information on womens health topics such as healthy eating,personal and menstrual hygiene and maternal health.In total,the HERproject has benefited about 20,000 workers to date in the supply chain,half of whom were women in the HERhealth program.In FY21,we plan to expand the HERhealth program to Cambodia.Our aim is for 40,000 workers to benefit from HERhealth by FY23.Make empowerment and life-skills programs available to 250,000 workers across our supply chain 2030 GOALAs of FY20,the HERproject has benefited about 20,000 workers to date in the supply chain,half of whom were women in the HERhealth programIn FY20,we partnered with the International Finance Corporation(IFC)and the International Labour Organisation(ILO)for their Gender Equality and Returns Program(GEAR),to support the achievement of our vision to increase the number of women in leadership positions in our factories by 25 percent by 2025.GEAR tailors its program for women working in garment factories to progress from factory workers to supervisors.The program is run by the IFC in partnership with the ILOs Better Work program.They train female workers in the people management and technical skills necessary to be promoted to more supervisory roles.They also work with factory management and training managers to identify,promote and support high-potential workers.We launched the GEAR program in selected Bangladesh factories at the end of FY20 and plan to roll it out to additional factories in the region throughout FY21.37GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESEXPANDING THE REACH OF BETTER LIFEOur Better Life programs complement the monitoring,auditing and capability building we undertake through our social compliance program.In FY21,we will expand the Better Life programs by continuing to:Promote effective factory grievance mechanisms in all factories through our Operating Standards and also confirm a process of escalation that ensures our involvement and appropriate follow-up.This RL Grievance Mechanism Program for factory workers was started in FY20 and continues to expand factory by factory.Work with suppliers to develop transparent human resource systems for wages in their factories,and we will undertake several wage studies in our key sourcing regions to deepen our understanding of workers pay levels and needs.In FY20,we created our wage management strategy to focus on developing human resource systems with suppliers that will support the opportunity to advance compensation for workers.As part of this work,we started in-depth wage analyses and data gathering in key sourcing countries.We will continue to engage factory management on the results of this assessment and next steps.We look forward to sharing more details about this strategy in coming years.FOREIGN MIGRANT WORKER POLICY AND ERADICATING MODERN SLAVERYMigrant and foreign migrant workers can be particularly vulnerable to exploitation and unfair employment terms.Because of this,we have a robust Foreign Migrant Worker Policy to secure fair employment terms for these groups,no matter which country they have traveled from to seek work.Our Policy instructs suppliers to minimize the use of recruitment agents.When an agency must be used,it is forbidden from charging workers fees to obtain a job.If suppliers are using an agency,they must:Work with only one agency per country.Conduct background checks and due-diligence monitoring.Have service agreements with the agency that prohibit discrimination,fees and using subagents.The agreement must also grant the supplier the right to audit the agency.Make grievance mechanisms available to workers during recruitment with the agency.Our social auditing protocol includes foreign migrant worker interviews to verify compliance with our Policy.In FY20,our monitoring identified issues with two factories in Taiwan,where the law permits agents to charge workers fees.Our Policy provides protection above the Taiwanese legal requirement,and we therefore took action to eliminate this practice at the two factories.One factory has since stopped producing for us and was removed from our approved finished goods factory list.The second factory has changed its practices and is now paying the fees,so the workers are not charged.We will monitor compliance going forward and the factorys continued relationship with us will be contingent on full compliance.We respect universally accepted human rights and assess our supply chain for risks including forced labor,human trafficking,deceptive recruiting and child labor.People exploited in these ways cannot refuse or cease work because of coercion,threats or deception and may also be deprived of personal freedom.We have a long history of preventing and,in rare cases,remediating when necessary a wide range of issues in our supply chain,including forced labor,child labor and other human rights abuses.We strictly prohibit all such practices and have made modern slavery a zero-tolerance issue among other zero-tolerance issues discussed on page 38.When we evaluate potential new factory partners,we undertake risk assessments as part of our social auditing program.If a potential issue is uncovered,that factory will not be approved until the issue is satisfactorily remediated.For current partners,if we identify and validate a noncompliance with our requirements for eradicating slavery or human trafficking,we will work with that supplier to make immediate changes;otherwise we will cease business relations.We also fully support the efforts of a growing number of nongovernmental organizations and local and national governments to shed light on human trafficking,slavery and child labor in the supply chain.Roll out our Wage Management Strategy to all of our strategic and key suppliers to address fair and timely compensation for factory workers 2023 GOAL38GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESSOCIAL COMPLIANCE PROGRAMFrom the first day a factory starts work for us,our social compliance program seeks to protect the rights of workers.We monitor compliance with our Operating Standards through independent third-party audits together with audits conducted by our in-house team and assessments from Better Work.Our overall monitoring system is shown below.Historically,our program has focused on tier 1 suppliers,factories and their direct subcontractors that provide us with finished goods.We plan to expand our monitoring of tier 2 suppliers in FY21 with a focus on key mills and raw material suppliers.We prioritize which facilities to audit based on risk assessments,including factors such as business volume,country and the associated supplier risk ratings.ZERO-TOLERANCE ISSUESOur Operating Standards identify 10 categories of zero-tolerance issues.We will not accept these in our supply chain and will de-list factories that do not rectify any instances identified during monitoring or through our grievance work.Social audit QA and Security on-site evaluation3rd-party audits for RLC3rd-party remediation site visitsSocial compliance reviews conducted by RLCAudits conducted by Better WorkAdvisory and training visits conducted by Better WorkAssess business,quality,security,and social standards prior to onboardingApproved SuppliersOnboardingSocial audit for compliance with Operating StandardsFollow-up visits,long-term capability-building engagements,and trainingValidate the consistency of 3rd-party audits and develop supplier relationsSocial audits in specific countries where the Better Work program operatesBetter Work follows up on issues and provides guidance and training Pervasive nontransparent record keeping Not paying minimum wage Monetary fines Locked emergency exits Unauthorized subcontracting Forced labor/Human trafficking Child labor Abuse(physical,verbal)Harassment(including sexual harassment)and discrimination Bribery SOCIAL COMPLIANCE PROGRAM AND BETTER WORK ASSESSMENTS39GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESAUDIT FINDINGS Seventy-five percent of factories supplying us were audited in FY20.We conducted a total of 466 audits between our tier 1 factories and subcontractors.Of these,392 were at tier 1 factories and 74 at subcontractors.Independent third parties conducted 333 of the audits,Ralph Lauren conducted 48 and Better Work 85.We also screened potential new suppliers with 106 initial on-site evaluations and 65 social audits.During the year,independent third-party remedial experts started nine long-term capability-building remediation programs to confirm that corrective action was implemented and to provide trainings and support where needed.The most common categories of nonconformance were health and safety(55.7 percent),legal and ethical standards(13.9 percent),wages and benefits(13.7 percent)and working hours(10.1 percent).We review all nonconformance issues with the supplier and require that they be addressed in a timely manner.Every audit has corrective action plans that are later verified.Less than 1 percent of audit findings revealed zero-tolerance issues(34 of 4,501 total findings).Ten suppliers were deactivated due to their inability to remediate zero-tolerance or other Operating Standards requirements.Audit/inspection type*FY19FY20Initial on-site evaluations144106Audits conducted by 3rd party334333Audits conducted by Ralph Lauren 1448Audits conducted by Better Work 7585Percentage of total audits that were fully unannounced*71r%*We had to cease the majority of our auditing in the last quarter of FY20 due to COVID-19 restrictions.*Percentage excludes audits performed in countries where unannounced audits are not permissible as well as pre-approval audits.FY20 CORRECTIVE ACTION STATUS1255%remediated33%remediated pending verification12%currently in remediationOtherWorking HoursWages&BenefitsLegal&Ethical StandardsHealth&SafetyFY2055.70.93.69.06%6.62%NONCONFORMANCE BY CATEGORY75 percent of factories supplying us were audited in FY2012 Corrective action status is solely based on our third-party audits.40GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESA CULTURE OF OWNERSHIP AND IMPROVEMENT Our social compliance program builds on the trust established with our suppliers.Our mutual aim is for factories to be responsible for managing worker and environmental issues and to embed systems for continuous improvement.We expect to see progressive improvement in standards across our supply chain,implemented pro-actively by our suppliers.We create risk segments within our suppliers based on their audit results(see chart).This is part of the supplier scoring in our Supplier Engagement program and directly influences our sourcing and business decisions.In FY20,there was a reduction in the percentage of high risk and unrated factories.FY18FY1911H%4%4$%4%No RatingLow RiskMedium RiskHigh-Medium RiskHigh RiskFACTORY RATINGSLICENSEES In addition to our own products,we license the Ralph Lauren brands to selected companies.All licensees are required to have social compliance programs and standards equivalent to our own.While these companies are outside the scope of our program,we assess licensee supplier compliance programs and review their audits to ensure that they meet our requirements.In FY20,32 suppliers used around 346 factories to make licensed products.CAPABILITY BUILDINGWe targeted our capability building training events to help suppliers in regions where there is a shared compliance problem.In FY20,we held two summits for suppliers,targeting regional issues.In Cambodia,The Better Factories program identified a pattern of repeat issues,where remediation was often temporary,and the same problem would recur in a subsequent audit.We held a full day summit for Cambodia suppliers to explain our social compliance and Operating Standards in detail and discuss strategies for improving and maintaining compliance at factories.We encouraged them to lower their rating by one full category within a yearfactories failing to achieve this will be required to participate in additional remediation and capability training.In Italy,we identified a potential risk of unauthorized subcontracting and the associated risk of forced labor among their immigrant workers.We immediately held a supplier summit to bring awareness and address the issue.We are currently working on an enhanced supplier mapping and verification process to ensure that there are no unauthorized facilities in our supply chain.This will ensure our presence in all of our subcontractor facilities and ability to monitor them on a regular basis.FY201c %2AGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVESCAPACITY ASSESSMENT Achieving consistent working hours within acceptable limits remains a top issue in our industry.Excessive working hours have many causes,and we acknowledge that apparel brands like ours can be part of the problem but also part of the solution.If we place orders at short notice with a factory,we can exceed its capacity to supply us on time.As a consequence,the factory might subcontract the work without our authorizationwhich we do not allowor impose longer hours on its workers to fulfill our orders.To avoid this,we plan our orders early,providing enough time to review the capacities and capabilities that exist in our supply chain,as well as anticipate new capabilities that might be needed for upcoming seasons.We then confirm available capacities ensuring that product orders are allocated to the right manufacturing partners that possess the adequate time and skills.To further our capacity assessments,we established an internal Manufacturing Excellence team that works closely with factories in implementing the best production control processes and quality systems,ultimately improving their efficiency and productivity.We also use local teams,which are trained with Ralph Lauren quality standards,to ensure that no unauthorized subcontracting is used.When they recognize signs of overload they will partner with the capacity and merchandising teams to overcome the existing bottleneck and mitigate potential future problems.We conduct quarterly capacity reviews that take into account our suppliers social compliance scores,capacity,quality metrics and outstanding orders.Our sourcing team confirms supplier capacity to fulfill our orders by reviewing order placements on a weekly basis to ensure that commitments given to suppliers ahead of time are adhered to.About This Report Our report covers fiscal year 2020(FY20),from March 31,2019,to March 28,2020.*The report is supported by our Standards Supplement,which includes two best-practice reporting indices:the Global Reporting Initiative and Sustainability Accounting Standards Board.For information on our Company and financial performance,please see our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission.Throughout this report,references to Ralph Lauren,ourselves,we,our,us,and the Company refer to Ralph Lauren Corporation(RLC)and its subsidiaries,unless the context indicates otherwise.This report contains goals,initiatives,and forward-looking statements(“Forward-Looking Statements”)based on current expectations.Various statements in this report or incorporated by reference in this report,in previously submitted and future filings by us with the Securities and Exchange Commission,in our press releases,and in oral statements made from time to time by us or on our behalf constitute Forward-Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995.Forward-Looking Statements are based on current expectations and are indicated by words or phrases such as anticipate,outlook,estimate,expect,project,believe,envision,can,commit,will,aim,seek,goal,target,and similar words or phrases.These Forward-Looking Statements involve known and unknown risks,uncertainties,and other factors which may cause actual results,performance,or achievements to be materially different from the future results,performance,or achievements expressed in or implied by such Forward-Looking Statements.These Forward-Looking Statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties,many of which are unforeseeable and beyond our control,that could cause actual results,performance,or achievements to materially differ.These risks include,but are not limited to,those identified in the Companys Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,and Form 8-K reports filed with the Securities and Exchange Commission.We undertake no obligation to publicly update or revise any Forward-Looking Statements,whether as a result of new information,future events,or otherwise.The information indicated herein is subject to the precision of our data collection and analysis method,which is subject to future evolution and calibration.Such information is subject to additional uncertainties,as there are limitations inherent in our data collection and analysis method.While we consider information from external resources and consultants to be reliable,we do not assume responsibility for its accuracy.Additionally,all numbers referenced are subject to the quality and comprehensiveness of the reporting received by the Company from internal and external sources and therefore are approximate and/or estimated values.It is also important to note that the availability of data varies from section to section of this report.*Availability of data varies with respect to fiscal or calendar year format.References to fiscal year will be represented as follows:Fiscal followed by the year;for example,Fiscal 2020.References to calendar year will be represented by the year alone;for example,2020.In general,throughout this report,metrics and data are presented in a fiscal year format,and activities and events are presented in a calendar year format.We use a 52-to 53-week fiscal year ending on the Saturday closest to March 31.All references to Fiscal 2018(FY18)represent the fiscal year ended March 31,2018;Fiscal 2019(FY19)represent the fiscal year ended March 30,2019;references to Fiscal 2020(FY20)represent the fiscal year ending March 28,2020.42
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Global Citizenship&Sustainability Report2022IN TRODU CTION&OV E RV IE WA Message from Our Chairman and CEO 3Our Global Citizenship&Sustainability Approach 4Our Goals 6Our Year in Review 7Governance 8CR E ATE W ITH IN TE N TIntegrated Circularity 11Sustainable Materials 14Responsible Design 21Responsible Sourcing 25PROTECT TH E E N V IRON ME N TClimate 29Water Stewardship 35Waste Management 39Chemical Management 43CH A MPION B E T TE R L IV ES Diversity,Equity&Inclusion 46Employee Well-Being 52Community Engagement&Philanthropy 53Rights and Empowerment in the Supply Chain 592 02 2 ESG SU PPL E ME N T Factory Disclosure 70Collaborating for Impact 72Global Reporting Initiative 75Sustainability Accounting Standards Board 89Task Force on Climate-Related Financial Disclosures 94A B OU T TH IS R E P ORTTable ofContents2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|2Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewFor more than half a century,weve stood for things that last that never go out of style.This core belief in timelessness influences everything we create from our iconic Polo shirt to our cashmere sweaters and hand-stitched ties.These products and more were created to be worn,loved and passed on through generations.Today,we are applying this philosophy beyond the products we make and into the world around us.We are calling this next chapter in our Citizenship and Sustainability journey Timeless by Design.It represents our commitment to ensure timelessness is embedded from inspiration through to products every use and reuse across generations taking into account how we value nature,and how we champion the people and communities that intersect our business.This years Global Citizenship and Sustainability Report captures this ambition and reflects on this past years progress,including:Strengthening our commitment to advancing a circular economy through our new Live On promise to enable our past and future products to live on responsibly by 2030;Dear Teams,Customers,Community and Business Partners,Investors and Friends,A Message From Our Chairman and CEORALP H LAU R E NPATR IC E LO UV E TExecutive Chairman and Chief Creative OfficerPresident and Chief Executive Officer Establishing an internal Design with Intent department focused on culturally sustainable design,product development and storytelling;Deepening our work across Native and Indigenous communities,including the launch of our Artists in Residence program;Expanding our portrayal of the American dream through our HBCU collaboration Polo Ralph Lauren Exclusively for Morehouse and Spelman Colleges Collection;Introducing the RLX CLARUS Polo Shirt,made with the worlds first high-performance cotton fabric comprised of 50%recycled cotton;and Creating the U.S.Regenerative Cotton Fund with the Soil Health Institute to expand climate-smart agriculture on American cotton farms.Our commitments and this progress reflect the incredible passion of our teams and represent a strong foundation on which we will continue to build.Our Timeless by Design philosophy was embodied in the very first tie created more than 55 years ago,and today,it extends wider and deeper into the precious world and communities around us.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|3Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur Global Citizenship&Sustainability Approach“I discovered the heritage of a timeless world,uncontrived,free-formed and free-spirited,natural and from the earth,and it touched me and became the living part of all I design.”RALPH LAURENFor more than 50 years,weve stood for values and things that last things that are timeless and enduring,things to cherish as they age and that never fall out of style.This belief remains central to who we are today.It is with this core belief that we have reimagined our pursuit of a more equitable and sustainable future.We are taking what it means to create timeless style and creating a business and products that are not only enduring but can inspire the dream of a better life with a plan for a better future.We call this evolution Timeless by Design.With Timeless by Design,we are taking our philosophy of creating products that are meant to be passed down through generations and applying it to everything that we do from how we make our products,to how we impact the Earth and how we champion our people and our communities.Our Timeless by Design approach is supported by three pillars:Create with Intent,Protect the Environment and Champion Better Lives.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|4Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCR E ATE WITH I NTENTWeve always created products that are meant to be loved and passed down from generation to generation.Now,we are making those pieces more responsibly:with more sustainable materials,according to circular design principles and by instilling cultural sustainability practices.By designing timelessness in from the start,well enable all our products to live on responsibly.PROTECT TH E ENVI RONMENTCreating timeless products goes beyond their design.We strive to operate our business in ways that respect our planet,such as using renewable energy,managing our waste properly and using our water responsibly.By adopting practices that help preserve the worlds natural sources,we can be stewards in protecting our environment for generations to come.CH A MPION B E T TE R L IV ESCreating a business that is timeless and has a positive impact on tomorrow means building relationships that stand the test of time ensuring everyone is included,respected and empowered.Thats why were committed to working with and supporting our employees,partners and communities to build a brighter future.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|5Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur GoalsCREATE WITH INTENTEnsure all of our design,production and merchant teams receive annual training on sustainable,circular,inclusive and culturally aware designFive of our iconic products will be C2C-Certified by 2025Offer high quality products made with 100%recycled cotton by 2025Enable our past and future products to Live On responsibly by 2030Set and implement circular principles into our design and development process by 2025Connect consumers with options to rent,repair and recirculate our products in select top cities by 2025Invest in scaling innovative technologies and regenerative practices to advance a circular economy by 2025Achieve 100%sustainably sourced key materials by 2025100%of animal-derived materials will be certified to an animal welfare standard and traceable by 2025Achieve 100%wood substrates used in key elements of new store interiors Forest Stewardship Council(or equivalent)Certified repurposed or recycled by 202580%of our business will be with key and strategic suppliers that meet the criteria across business,social and environmental performances and potential by 2025ACHIEVED FOR FY22ON TRACKON TRACKON TRACKON TRACKON TRACKON TRACKEnsure at least 20%of our Global Leadership Team is comprised of underrepresented racial and ethnic groups by FY23Maintain gender parity with equal representation in leadership positions at the VP level and aboveIncrease employee volunteer hours by 25%compared to a FY22 baseline by 2025Roll out our Wage Management Strategy to all of our strategic and key suppliers to address fair and timely compensation for factory workers by FY23Make empowerment and life skills programs available to 250,000 workers across our supply chain by 2030 Achieve a 25%increase of women in factory leadership that seeks to create a path to parity by 2025CHAMPION BETTER LIVESACHIEVED FOR FY22ON TRACKON TRACKON TRACKON TRACKON TRACKPROTECT THE ENVIRONMENTReduce absolute Scope 1,2 and 3 GHG emissions by 30%by 2030(SBTi-approved)from a FY20 base year and achieve net zero by 2040Power our owned and operated offices,distribution centers and stores with 100%renewable electricity by 2025Develop a biodiversity strategy and set goals aligned with the Science Based Targets for Nature by 2024Achieve at least a 20%reduction in total water use across our operations and value chain,compared to a FY20 baseline by 2025Achieve zero waste to landfill across our distribution centers by 2023 Achieve 100%recyclable,reusable or sustainably sourced packaging materials by 2025Eliminate the use of hazardous chemicals in our supply chain by 2025NEWNEWNEWNEWON TRACKON TRACKON TRACKON TRACKON TRACKON TRACKNEW2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|6Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur Year in ReviewCR E ATE WITH I NTENT Transitioned 95%of Ralph Lauren Home core bedding and bath and new fashion bedding to cotton qualities we consider sustainable,such as organic or Better Cotton 77%of our units produced in FY22 met at least one sustainable material criterion up from 33%in FY21 Established an internal Design with Intent department focused on culturally sustainable design,product development and storytelling Continued our commitment to full transparency with disclosure of Tier 1 factories and processing units covering 98%of our businessPROTECT TH E ENVI RONMENT Open-sourced the ECOFAST Manual to improve dyeing process and accelerate change in the industry and launched Color on Demand as part of our in-store experience Achieved 92%waste diversion rate in our North America-owned distribution centers,including diverting more than 17,000 pounds of hangers at our North Carolina distribution center from landfill by working with local recycling vendorsCH A M PIO N B E T TER LI VES Donated over$2.5 million from the Ralph Lauren Corporation and The Ralph Lauren Corporate Foundation to scholarship funds and educational entities dedicated to providing equitable access to higher education across all races and ethnicities Provided more than 42,000 workers,of which 66%are female,with access to health education programs,as part of our partnership with HERproject Deepened transparency on our human rights due diligence throughout our supply chain,sharing more details and progress on our goals in wage management and womens empowerment2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|7Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewGlobal Citizenship&Sustainability is integrated across all levels of our organization and governed by our Board of Directors.GovernanceOur Board of Directors(the Board)is responsible for formal governance of Global Citizenship&Sustainability(GC&S).The Board receives progress updates at least once a year and reviews our annual GC&S Report.Various Board committees have additional responsibilities:The Nominating,Governance,Citizenship&Sustainability Committee oversees our environmental,social and governance(ESG)risks and opportunities.The committee receives quarterly updates;reviews initiatives,goals and policies;and makes recommendations to the Board on ESG matters.Each quarterly update includes a detailed analysis on a specific ESG topic.The Finance Committee and the Nominating,Governance,Citizenship&Sustainability Committee advise on the incorporation of goals into our corporate strategy and engagement of business initiatives that influence corporate citizenship and sustainability.The Audit Committee assesses ESG risks as part of its overall Enterprise Risk Management(ERM)review.The Talent,Culture and Total Rewards Committee considers performance against Company ESG key performance indicators in their compensation decisions.Our Global Citizenship&Sustainability Steering Committee includes senior leaders from across our Company and meets regularly to prioritize our approach and allocate resources.Committee members also define,track and champion our citizenship and sustainability work,including diversity,equity and inclusion across the organization.In April 2022,we expanded the responsibility and accountability of our Chief Communications Officer into the new role of Chief Impact&Communications Officer.This position was created in recognition of the evolving role business plays at the intersection of ESG strategy,policy,communication and action.For more information on our governance structure,policies and other additions,please see our 2022 Proxy Statement.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|8Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewM AT ERIA L ITY As part of regular business operations,we complete an updated materiality assessment every two to three years to refine our understanding of key priority issues based on sustainability risks,opportunities and impacts.We aim to align these with stakeholder expectations for how we react to impacts of issues on business success,as well as the impacts of the business on the economy,environment and people.We worked with Business for Social Responsibility(BSR),a third-party consulting company,to complete the assessment using their Double Materiality methodology in 2022.BSR engaged internal and external stakeholders through interviews,focus groups and surveys to analyze our Companys impact on society and the environment,along with our enterprise value.Among the external stakeholders were environmental and social NGOs,supplier and licensee partners and global retailers.Internal stakeholders included employees across all functions,all geographies and levels of the organization.As this latest assessment was completed in May 2022,the FY22 report will primarily use our prior materiality assessment as a basis for reporting.We found that similar issues to our last assessment remained material along with an increased focus on:Business Ethics Climate Change Diversity,Inclusion&Fair Treatment Human Rights Due Diligence Raw Material Sustainability Traceability of Raw Materials Waste Water StewardshipThe ranking of issues seen below will influence and drive our future GC&S strategy.Impact on Society and EnvironmentImpact on Enterprise ValueHuman Rights Due DiligenceWater StewardshipClimate ChangeRaw Material SustainabilityDiversity,Inclusion&Fair TreatmentTraceability of Raw MaterialsWasteBusiness EthicsResponsible Product DesignDeforestationGlobal Philanthropy&CommunityEngagementStakeholder EngagementAir PollutionBiodiversityChemical ManagementSustainable ConsumptionProduct CircularityOccupational Health&SafetySupplier ESG CapacityPackagingAnimal WelfareSupplier DiversityProduct Quality&SafetyTax HavensResponsible MarketingPublic Disclosures&AccountabilityLiving Wage/Wage ManagementShared ValuesSuccession Planning,TalentOptimization&RetentionRemuneration&Employee BenefitsGood JobsCommunityEnvironmentGovernancePeopleProductSourcing2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|9Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCreate With IntentIN TH IS SECTIONIntegrated Circularity 11Sustainable Materials 14Responsible Design 21Responsible Sourcing 25FPO IMAGESince the inception of our Company,weve always believed in creating things that last.Today,we are embracing our philosophy of timelessness to create more responsibly with more sustainable materials,according to circular design principles and by instilling cultural sustainability practices.With Timeless by Design,we are embedding timelessness from inspiration through to products every use and reuse across generations.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|10Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewIntegrated Circularity We have always believed in creating timeless products that are meant to be worn,loved and endure the test of time.Embracing this philosophy,we are implementing responsible design practices,according to circular principles,and extending to consumer experiences.Five of our iconic products will be Cradle-to-Cradle(C2C)-certified Offer high quality products made with 100%recycled cotton Invest in scaling innovative technologies and regenerative practices to advance a circular economy Set and implement circular principles into our design and development processEnable our past and future products to Live On responsibly2030 GOAL2025 GOALSleading circular economy network bringing together businesses,innovators,cities,universities and thought leaders to build a circular economy and scale solutions globally.EMF and its fashion industry partners work to drive momentum toward its Make Fashion Circular vision where clothes are used more,made to be made again and crafted from safe and recycled or renewable materials.As part of this,Ralph Lauren will capture circularity progress across our operations using Circulytics,a company-level measuring tool developed by EMF.We also joined a coalition of 100 brands,mills and manufacturers in EMFs Jeans Redesign Project,to contribute to a blueprint for scaling denim production based on the principles of a circular economy.Additionally,we are committed to designing new products according to circular principles,and extending the life of current apparel by piloting ways to rent,repair and recirculate.Investing in circular innovation across the industry is also integral to our mission.Anchored in this commitment and our long-standing vision of timeless style,our circularity strategy is helping to shape our approach to product development and to supporting a more circular textile economy.We continue to explore partnerships with credible experts within the industry.In 2021,Ralph Lauren joined the Ellen MacArthur Foundation(EMF)as a Network Partner and member of the Fashion Advisory Board.EMF is the worlds CIRCULARITY STRATEGYRalph LaurenConsumer ExperiencesEnable CircularDesign for CircularityAdvance theCircular EconomyPRODUCT SERVICESYSTEMS2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|11Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewD ES IGN PRO DUCTS FOR CI RCULA R ITYWere focused on applying the principles of Cradle to Cradle(C2C)as foundational inspiration for all aspects of design,development,manufacturing,packaging and the post-sale experience.Ralph Lauren has been working closely with the Cradle to Cradle Products Innovation Institute to support the adoption of the latest version of the C2C standard and to provide apparel brand perspective on its use.In FY22,we began working on our first C2C-Certified product,a luxury cashmere sweater,which will be in-market late 2022.Later this year,we will be kicking off two additional C2C product certification projects and PILLARPRODUCTDesign for CircularitySERVICEEnable Circular Consumer ExperiencesSYSTEMSAdvance the Circular EconomyGOALSBy 2025,five of our iconic products will be C2C-Certified.By 2025,we will offer high quality products made with 100%recycled cotton.We will set and implement circular principles into our design and development process by 2025.By 2025,we will connect consumers with options to rent,repair and recirculate our products in select top cities.By 2025,we will invest in scaling innovative technologies and regenerative practices to advance the circular economy.OUR COMMIT-MENTWe will pursue Cradle to Cradle certification for additional products,leverage innovative technologies to further our development of high-quality,100%recycled cotton products and work cross-functionally to develop a set of circular design principles tailored to Ralph Lauren.We will establish both physical and digital platforms that connect consumers to services that help extend the life of their Ralph Lauren products.These include opportunities to sell and buy preloved items,rent iconic pieces and locate resources for recycling maintenance and repairWe will deepen our investment in innovative technologies and regenerative practices to accelerate the production of high-quality,nature-based raw materials and products.The Three Pillars of Our Circularity Strategybegin leveraging circular principals to influence additional design and development.We will begin applying circularity to our broader design and development approach through the development of Ralph Lauren specific circularity principles.These will be developed with our design and development teams and in collaboration with sustainability and circularity experts.By 2030,our new products will be designed,developed,manufactured and packaged in alignment with these principles.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|12Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCR E ATE C IRC ULAR CONSUMER EX PE RIEN C ESRalph Lauren has committed to extend the life of its products by 2025 by providing consumers ways to rent,repair and recirculate our products.Rental continues to be one of the pillars of our circular strategy.This year,we are broadening The Lauren Look,our first subscription apparel rental platform,beyond the Lauren Ralph Lauren brand,to include our womens Polo Ralph Lauren brand.In addition to introducing rental programs to consumers,we are donating products that are no longer in circulation to Delivering Good,a nonprofit that gives manufacturers and retailers an efficient way to share excess inventory across their network of nonprofits to help those stricken by poverty,or to provide disaster relief to communities in need across the United States.We will offer more circular services for consumers as we continue to enable the recirculation of Ralph Lauren product through our various digital and brick and mortar distribution channels.We will also continue to lean into upcycling Ralph Lauren products.Our Digital Product ID(DPIDs)system provides a scannable QR code on product labels that enable consumers to authenticate garments,affirming the value of products in resale markets.This digital data platform will be further leveraged to support other recirculation opportunities such as recycling and repair.A DVA N CE A CIRCU L A R PRODU CT ECON OMY We believe Ralph Lauren has a unique and important role to play in supporting the advancement of a more circular apparel economy.We will continue to invest in collaborative and innovative partners to help scale technology and materials solutions.Specific investments,such as our significant support of Natural Fiber Welding Inc.,help to increase the availability of high-quality inputs and significantly reduce dependence on the extraction of virgin materials.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|13Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur focus on quality and authenticity drives us to look for sustainable raw materials through the lenses of durability,craftsmanship and performance.Our sustainable material strategy is driven by our ethos of creating more positive environmental and social outcomes through the sourcing decisions we make.We recognize the importance of supporting fiber production that contributes to ecosystem functioning and soil health to support a sustainable and profitable fiber industry.A key aspect of our sustainable materials strategy is to pioneer,foster and scale impact through industry partnerships like the Fashion Pact,UNFCCCs Raw Materials Working Group and Textile Exchange,as well as make long-term commitments that advance our goals.This includes an investment in Leather Impact Partnership Incentives through Textile Exchanges Leather Impact Accelerator and Sustainable MaterialsWe commit to using more materials in a way that results in positive social and environmental impact,protects biodiversity,advances animal welfare and continuously improves the traceability of our raw materials.Achieve 100%sustainably sourced key materials 100%of animal-derived materials will be certified to an animal welfare standard and traceable Achieve 100%wood substrates used in key elements of new store interiors Forest Stewardship Council(or equivalent)Certified repurposed or recycled by 20252025 GOALSThe Ralph Lauren Corporate Foundations founding contribution to the Soil Health Institute to create the U.S.Regenerative Cotton Fund(USRCF).In FY22,we continued to increase transparency and traceability of our material use by:Continuing to map our supply chain to enable material origin visibility across each step of the textile and garment supply chain to inform a robust sourcing strategy,provide assurance of sustainability impacts and mitigate risk.We are piloting technologies to digitally trace U.S.-grown cotton as well as certified fibers in our supply chain.In addition,we are using FIBRETRACE,a technology which relies on luminescent pigments within the fiber to enable physical traceability,piloting on transitional cotton sourced from India.Continuing to work towards developing systems to measure the total volume(by weight)of materials used in our product,which will enable us to systematically track our usage more accurately and thus analyze the sustainable attributes and the impact of our material usage.In January,we launched our Global R&D Studio(Fabrics and Leathers)as a physical and virtual resource built on the principle that all materials must have sustainable attributes.The Studio is a central resource hub for material and processes criteria,guidelines and developments,including our raw material sustainability dashboard.Designers are able to leverage this resource to source vetted and secured materials.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|14Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&Overview 100%of our cotton will be sustainably sourced,defined as:Better Cotton,organic,transitional,recycled,regenerative or Fair Trade-certified by 2025 100%recycled polyester by 2025 100%Responsible Wool Standard-certified or recycled wool by 2025 100%of viscose will be sourced and verified through CanopyStyle audits by 2025 100%of leather will be traceable and verified to animal welfare and land management standards,or covered by Impact Incentives and 100%of our tanned leather will be Leather Working Group-certified by 2025 100%Responsible Down Standard-certified or recycled down and feathers by 2023 100%Sustainable Fibre Alliance-certified(or equivalent)or recycled cashmere by 2025 100%of the wood substrates used in key elements of new store interiors will be FSC-certified(or equivalent),repurposed or recycled by 2025KEY MATERIAL GOALS DIG ITA L PRODU CT IDE N TIFICAT I O NIn 2019,we launched a digital product identification program to link our physical product with the digital world in order to power product authentication,further digitize our supply chain operations,deliver an enhanced consumer experience and enable a platform upon which to build future services and experiences.Our DPIDs are hosted on an agile platform so that we can continue to add and scale new features and capabilities,such as facilitating the reuse,resale and recycling of our products to enable a more circular life cycle.The overall goal is to reduce the environmental impact of labeling while improving consumer information access and enabling continuous cycling of textile resources.To date,weve incorporated more than 200 factories into the DPID program,and as a result,a majority of our apparel products now have digital IDs,and we expect every product to have a digital ID by 2024.77%of our units produced met at least one of our sustainable material criteria in FY22 up from 33%in FY21.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|15Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewSU STA IN A B L E I NNOVATI ONS I N S P O RTSWEARIn FY22,we enjoyed success through two separate endeavors in the world of sport.First,our partnership with Natural Fiber Welding was on display at the 2022 Australian Open with the launch of the RLX CLARUS Polo Shirt.It marked the unveiling of a first-to-market patented platform that transforms virgin and recycled cotton in ways previously not possible.The shirt featured a high-performance cotton that performs similarly to plastic-based synthetic fabrics like polyester and nylon,but without the use of petroleum-based fossil fuels.The shirt will be available to consumers worldwide in summer 2022.Second,we continued our partnership with the U.S.Olympic and Paralympic teams as their official Opening and Closing Ceremonies outfitter.These winter collections featured a range of sustainable materials and traceable production practices,including the use of recycled polyester,nylon and down along with Responsible Wool Standard(RWS)-certified,U.S.-grown wool.We were proud to dress the more than 1,000 members of Team USA who competed in Beijing.Were ramping up our cross-industry collaborative efforts alongside the refinement of our own goals.One example is our continued work with the Fashion Pact and Textile Exchange to solidify our biodiversity strategy.We are participating in working groups that are developing ways to address biodiversity issues in the leather and cashmere supply chains.This work will leverage the insights provided by the Biodiversity Insights Report,published by Textile Exchange in November 2021.This report provides the first tool for the apparel and textile industry to benchmark the sectors impacts on biodiversity.More holistically,we are evaluating how our existing climate,water and materials initiatives intersect with the protection and conservation of the natural world and where we have further opportunities.Our work today from our materials goals to our climate commitments provides a strong foundation for our biodiversity strategy,and we will build upon this foundation as we set further commitments to establish Science-Cased Targets for Nature.Further Committing to Nature2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|16Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&Overview2.11%WoolIn the U.S.,The U.S.Regenerative Cotton Fund(USRCF)works with growers to support adoption of soil health management systems,including practices such as cover crops and reduced tillage,across more than 1 million acres of U.S.cotton cropland.The USRCF is led by the Soil Health Institute(SHI),a nonprofit with a mission to safeguard and enhance the vitality and productivity of soil through scientific research and advancement.The USRCF is a first-of-its-kind,farmer-focused and science-based effort to support long-term,sustainable cotton production in the U.S.The USRCF brings together a diverse group of farmers,advisors,landowners,conservationists,soil scientists,educators,business leaders,philanthropists and others who share a common belief that together we can create a long-term sustainable cotton industry in the U.S.The founding investment from The Ralph Lauren Corporate Foundation enables SHI to accelerate and scale these efforts to reach farmers in a way they havent before.FY22 MATERIAL USE80.7%Cotton3.9%Animal derived6.6%Polyester6.9%Other1.4%Nylon0.5%Viscose1 FY22 percentages are based on units,not weight of raw materials.Percentages may not add up to 100 due to rounding.2 Primarily includes additional materials used in our accessory and footwear products.0.38shmere0.15%Silk1.26%Leather/SkinsANIMAL DERIVEDCottonCotton accounts for more than 80%of our total material use.In FY22,84%of our cotton products met at least one of our defined sustainability attributes.This year we continued our transition to sustainable cotton for apparel products,including polo shirts,knits and shirts,Ralph Lauren Home transitioned 95%of core bedding and bath and new fashion bedding to cotton qualities we recognize as sustainable,such as organic or Better Cotton.In 2021,we sourced more than 19,000 metric tons of cotton lint as Better Cotton,while supporting the not-for-profits holistic efforts to make cotton a more climate-resilient,socially-viable and,ultimately,more sustainable crop.Supporting the increased supply of sustainably grown cotton on a global scale is imperative in order to meet our 2025 goal of using 100%sustainably sourced cotton.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|17Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewFurther,we plan to join the U.S.Cotton Trust Protocol in FY23.The Trust Protocol is a voluntary organization for U.S.cotton producers whose goal is to provide a comprehensive program of verification against Trust Protocol benchmarks.The Trust Protocol cotton is measured and analyzed at the field level to help farmers demonstrate their environmental credentials.This offers brands such as Ralph Lauren a unique set of assurances to measure sustainability commitments and to work towards tracing U.S.cotton through the supply chain.Organic cotton fiber currently makes up less than 1%of cotton grown annually.There are significant barriers for farmers who want to switch from conventional to certified organic farming,including financial challenges and a two-to three-year transitional period before achieving certification.Directly supporting farmers during this transition provides an opportunity for brands like Ralph Lauren to help increase the quantity of organic cotton available on the market.In Spring 2023,with the help of The Sourcery and our mill and factory partners,we will introduce products made with transitional or in-conversion cotton from farmers in India.P OLYESTER,NY LON AND VI S COS EWe are continuing our efforts to phase out virgin sources of polyester and nylon and switch to recycled options or natural fibers.Currently,polyester accounts for 6.6%of our total material use.In 2021,we:Used almost six million pounds of recycled polyester the equivalent of 52 million recycled plastic bottles and representative of 41%of our total polyester use(an 18%increase from FY21)Converted eight major programs across mens,womens and childrens Polo outerwear to recycled polyesterOur material teams continue to work with our suppliers to increase the percent of our viscose coming from viscose manufacturers with a“green shirt”rating on The CanopyStyle Audit.Through supplier surveys and other efforts,we achieved our bridge goal of sourcing 50%of our viscose from low-risk manufacturers in FY22.Animal-Derived MaterialsAround 4%of our total material use comes from animal-derived sources.We are committed to the well-being and respectful treatment of animals,as described in our Animal Welfare Policy,which includes our approach to sourcing exotic skins and our long-standing ban on the use of fur.In FY22,we continued increasing our uptake of sustainable materials and our focus on traceability.L E ATH E RIn 2021,64%of our leather tanneries were certified by the Leather Working Group(LWG).Over the past year we elevated our support of sustainable leather in multiple ways.Ralph Lauren was a pioneer brand in Textile Exchanges Impact Partnership Incentives for the Leather Impact Accelerator,investing directly in support of Brazilian cattle farms to be verified as Deforestation/Conversion-Free(DCF)and to achieve animal welfare certification in the next three years.We also joined LWGs Traceability Task Force and deforestation working groups to help guide further improvements in the leather trade.Lastly,we are participating in the steering committee for the development and finalization of the Responsible Reptile Sourcing Standard(RRSS)as part of the Southeast Asian Reptile Conservation Alliance(SARCA).2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|18Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewNFW MIRUMMIRUM is a revolutionary alternative material made from renewable resources that include plant-based materials and agricultural byproducts while also being free of synthetic plastics.We developed the MIRUM Olympic Patch in partnership with Natural Fiber Welding Inc,and added it to Team USAs parade apparel at the 2020 Tokyo Olympics as an initial test of the materials potential.We are currently sampling the material further to determine its best consumer utilization with an intention to launch the product in 2023.D OWNWe use 100%Responsible Down Standard-certified virgin down or recycled down across our product offerings.We also continue to leverage Primalofts ThermoPlumeTM down alternative,where applicable.Products using recycled down will be introduced in our stores in Fall 2022.WO OLWe continue to prioritize working with Responsible Wool Standard(RWS)-certified suppliers.Were exploring additional opportunities for our wool strategy in FY23,such as partnering with growers who are using regenerative practices and other certification options.CASH ME R EOur cashmere strategy focuses on sourcing preferred fibers such as Sustainable Fibre Alliance-certified cashmere that address animal welfare and land management risks,and recycled cashmere,which minimizes waste and has a smaller environmental impact compared to virgin material.In FY22,we used 3,691 pounds of recycled cashmere in sweater programs.In FY23,we plan to engage in project-based initiatives in cashmere-growing regions to support systemic change and grassland restoration.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|19Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewSustainable Store InteriorsWe are committed to designing and building Ralph Lauren stores with materials that minimize environmental impact and maximize occupant health.In FY22,we continued formalizing our approach to creating more sustainable spaces in our stores.Our goal is to ensure all the key elements in our new store interiors including fixtures,displays,flooring,hangers and signage are sustainably-sourced and made from materials that minimize environmental impact and maximize occupant health.We base our approach on guidelines from leading green building and sourcing organizations,including the U.S.Green Building Council(USGBC)and the Forest Stewardship Council(or equivalent).HIGHLIGHTS OF OUR PROGRESS INCLUDE:82%of wood hangers produced for RL retail stores,shop-in-shops and outlets in FY22 were made from FSC-certified(or equivalent)woods.100%of Childrens and Lauren millwork fixtures and wall units produced for North America shop-in-shops in FY22 were made from FSC-certified(or equivalent)woods.43%of shop-in-shops installed in Europe in FY22 used only millwork fixtures and wall units produced from FSC-certified(or equivalent),repurposed or recycled woods.100%of wood floors installed in new Polo boutique retail stores and Polo outlet stores in Europe in FY22 were made from FSC-certified(or equivalent)materials.Consistent with our Forest Protection Policy,we set a 2025 goal for 100%of the wood substrates(solids,veneers and composites)used in key elements of new store interiors to be FSC-certified(or equivalent),repurposed or recycled.In 2021,we began tracking the percentage of key wood suppliers for store design and construction that meet this standard and confirmed 10 met the benchmark by the end of fiscal year 2022,which represents 11%of our suppliers.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|20Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewResponsible DesignIn addition to adopting circular principles,we commit to embedding environmental and cultural sustainability,inclusivity and celebration into the products we design and stories we tell.Ensure all of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally aware designONGOING GOALto elevate this workstream of passionate individuals throughout our organization to a functional department of the same name.Now deeply embedded within our Companys organizational design,our Design with Intent department is being resourced with expert insight into culturally cognizant design and product development to think holistically about the stories we champion through product creation and storytelling.As one of its first efforts,Design with Intent is piloting an Artists in Residence program,inviting artisans working with a variety of skillsets,mediums and materials to collaborate with Ralph Laurens design teams.This is intended to be a mutually beneficial exchange of resources,talent and trade techniques.During their tenure,we expect each Artist in Residence to have the opportunity to create a special product collaboration,melding the brilliance and unique skill of the artisan with our core brand sensibilities.Our Cultural Awareness Guidelines also support our design approach.We update these annually,working with advisors and thought leaders within this space,and distribute them to all enterprise teams with a role in design,advertising and marketing.We support our teams to apply the guidelines in practice with our cultural awareness educational program,which is mandatory as part of our new hire onboarding process for all creative,design,marketing and advertising functions.Existing teams receive annual training and special workshops to stay current.Our Approach to DesignSince our founding,Ralph Laurens design ethos has been inspired by the many beautiful,complex and interconnected pieces that make up the fabric of America:its history,arts,crafts,cultures and most of all its vibrant people.The breadth and reach of our brands across generations and cultures creates a style that is authentic,timeless and truly personal.We take our responsibility seriously to use the inspiration that captivates our imagination in a way that is culturally aware and appropriate.We challenge ourselves to think differently and expansively about each stage of the design and development process.In 2020,we launched Design with Intent,a workstream aiming to identify and pursue opportunities to be intentional and impactful in all that Ralph Lauren represents from product inception to marketing and every point along the customer journey,including store design and e-commerce.In early 2022,we took the step 2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|21Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewNative American&Indigenous Community Engagement For 55 years,our brand has been a window for the world into American life and values.This is an immense responsibility,one that is deeply ingrained in our Purpose.We have drawn design and storytelling inspiration from the beautiful lands and individuals around us,and as we continue to evolve and grow,we believe it is important to more closely partner with the communities that inspire us.We recognize that we must honor the Native and Indigenous communities that so richly contribute to the culture of this country and many others.As we continue to expand our understanding and awareness,we are reviewing our internal creative processes focused on forging and expanding meaningful partnerships with community members and artisans and pursuing long-term pathways for collaboration.We intend to use our platform to amplify Native and Indigenous perspectives and create space for holistic and authentic storytelling.We seek to establish a credible model of cultural sustainability,where Native and Indigenous communities play a role in creating culturally relevant programming,storytelling and timeless products.In this work,we are developing Native philanthropic and partnership programs under the following pillars:community resilience reinforcement,scholarship and education support,cancer care and prevention,social partnerships,water accessibility and environmental preservation and design with intent.We approach this journey with humility and,above all,with dignity and respect for Native and Indigenous communities as our guiding principle.Our current efforts include:COMPA N YIncrease Representation,Recognition and Celebration Forming an external advisory body,comprised of diverse Native voices across industries and creative disciplines to help inform our actions.Launching an internal Employee Resource Group(ERG),known as our Native American&Indigenous Advisory Council,that will work in partnership with our DE&I and Design with Intent departments to advise on our Native and Indigenous cultural sustainability work.With this effort,we aim to reconnect with current employees and strengthen our ERG recruitment efforts for new employees who identify as Native American or Indigenous.Aiming to deepen our talent pipelines and academic partnerships through programs like the Creative Futures Collective,Institute of American Indian Arts(IAIA)and the American Indian College Fund intending to reduce barriers to entry into the fashion industry and providing more opportunities for Native and Indigenous talent at various levels of our Company.Continuing to honor moments in the calendar important to Native communities,centering around the amplification of Native and Indigenous voices and perspectives,including but not limited to Native American&Indigenous Heritage Month.Strengthen Structured Education Practices Continuing to expand upon our mandatory cultural awareness trainings for all design,marketing and merchandising teams,specifically examining their content through a Native and Indigenous lens.Continuing to curate and host regular Speaker Series for our employees to learn directly from Native leaders,artisans,designers,historians,activists and more.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|22Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCOM M UN ITYBroaden Our Brand and Product Storytelling Seeking new ways to leverage our platform to amplify Native stories,perspectives and priorities.Recognizing Native and Indigenous provenance across product categories,including product descriptions and promotional storytelling.Increasing representation in front of and behind the camera,so that Native and Indigenous people are featured prominently on our owned platforms and have a stronger presence as creators behind-the-scenes.Design with Intent Evolving our creative design process to include culturally relevant collaborations,beginning with our Artists in Residence program,which launches in 2022.Expand Our Supply Chain Network Engaging responsibly and creatively with the global handcraft community and broadening our network of Native artisans,makers and sources.Aiming to diversify our investments in product development partners so that more of the sourcing organizations we work with are Indigenous-owned and-operated.S O CIETYForge New and Deepen Existing Partnerships Continuing to support organizations that elevate priorities and needs in Native communities through our Company and The Ralph Lauren Corporate Foundation,from equitable healthcare experiences to economic resilience programs to water access and beyond including plans to support the Johns Hopkins Center for American Indian Health,Arrowhead Entrepreneurship Program and DigDeep Navajo Water Project,among others.Creating pathways to engage with Native artisans and makers,building relationships based on respect and culturally sustainable practices,including partnering with and contributing to the IAIA and the IAIA Museum of Contemporary Native Arts.Engaging our employees in this work by creating opportunities for them to donate via our Ralph Lauren Matching Gift initiative and participate in our Ralph Lauren Gives Back volunteering program.Invest in Education Continuing to fund scholarships for Native and Indigenous students via the American Indian College Fund and IAIA,with hopes of expanding to additional programs and academic institutions in the future.Continuing to promote the adoption of inclusive curricula that details the full history of Native and Indigenous Americans,as demonstrated by our prior support of the Smithsonian National Museum of the American Indians Native Knowledge 360 education initiative.This framework will continue to evolve as our actions progress,and we will share our progress as we move forward in this work.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|23Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCASE STUDYIn Honor of Black Collegiate Style In March 2022,we were proud to build on our partnership with Morehouse College and Spelman College with a limited-edition collection inspired by the schools rich heritage and esteemed traditions.The collection seeks to honor the history of both colleges and widen the aperture of Ralph Laurens storytelling including the nature of life at historically Black colleges and universities(HBCUs),a story previously untold in depictions of Ralph Laurens collegiate sensibility.Conceptualized and designed by Morehouse and Spelman alumni at Ralph Lauren,the collection also marks the first time the brand has produced a campaign with an all-Black cast including its photographer,creative directors,cinematographer and talent predominantly comprising students,faculty and alumni at both institutions.Our first-of-its-kind film,“A Portrait of the American Dream,”and commemorative yearbook detail the founding and historical significance of HBCUs through the lens of these two institutions,demonstrating the use of style as an expression of aspiration,a form of self-empowerment and a tool of resistance.Further,The Ralph Lauren Corporate Foundation announced a$2 million commitment to support scholarships for Black students,including those at Morehouse College and Spelman College.Within this commitment,The Ralph Lauren Corporate Foundation will also support 10 additional HBCUs through the United Negro College Fund(UNCF).We also continued scholarship support for academic programs and scholarships supporting underrepresented students via the American Indian College Fund,Asian Americans for Equality,Asian&Pacific Islander American Scholars,the Asian University for Women in Bangladesh,the Hispanic Scholarship Fund and the Fashion Institute of Technologys Social Justice Center.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|24Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&Overviewfeedback on Responsible Purchasing Practices.Based on this feedback,internal working groups were established to focus on key improvement areas on five purchasing practices.Based on FY21 Better Buying Survey results,we updated our Responsible Purchasing Practices to support more understanding across our entire organization.We invited select suppliers to speak at various events across the Company to further inform our workforce about improvements in our overall efforts.We also created a mandatory training program for our entire Buying/Sourcing/Cross Functional teams and our working groups will continue to work with our teams on Responsible Purchasing Practices for constant improvements.We expect to collect the next round of Better Buying Survey feedback in summer 2022.During Supplier Summits and in one-on-one Supplier Engagement meetings,we communicated our expectations in Business,Quality Assurance,Global Citizenship&Sustainability,and sought feedback on expectations of us as a responsible partner.We also discussed how we can grow together with all suppliers,focusing on our key and strategic suppliers that represent the majority of our business.For more on our supplier and worker empowerment efforts,please see Rights and Empowerment in the Supply Chain.Responsible SourcingWe seek to work with partners who share our values and our commitment to conduct business with social and environmental integrity at heart.80%of our business will be with suppliers that meet key and strategic supplier criteria with potential in business,social and environmental performance.Supplier EngagementOur Supplier Engagement Strategy(SES)aims to achieve mutual,long-term,positive impacts across our supply chain.This requires enduring partnerships based on transparency and trust.Our SES guides us in building and maintaining these partnerships.It enables us to drive continuous improvement and positive impact based on shared transparency,accountability and value creation.We continue to strengthen our framework with frequent one-on-one supplier check-ins,semi-annual supplier summits and roundtable discussions.In FY21,we started working with the Better Buying Initiative to collect our business partners anonymous 2025 GOALOur Responsible Purchasing Practices define how Ralph Lauren conducts business with integrity,transparency,respect for universal human and labor rights and environmental sustainability.These standards are critical to our work as responsible corporate citizens.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|25Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewM A K IN G PRO GRES S AMI D O N G O IN G C H ALLENGESEven with pandemic-related challenges and disruptions,we continued to increase our business purchase value in FY22,to 53%(a 3%increase from FY21)with our Strategic and Key suppliers,aiming for 80%by 2025.We continue to make progress despite managing various country and factory lockdowns as well as ongoing worker shortages,which heavily impact our partners.Together with our partners,we took necessary actions to support and reallocate certain products between their factories or countries to mitigate risk and create supply chain agility.In FY22,we continued our efforts to empower suppliers to maintain and/or improve the performance of our product while reducing back and forth communication,sampling and reference materials.This important work is done through our continued efforts to certify suppliers internal testing labs for performance attributes of product,calibration/certification as it pertains to fit and construction approvals and the implementation of digital product approvals using 3D capabilities(where applicable).We also partnered with our mills via an independent third-party provider to digitize color approvals via spectrophotometer readings.In FY22,we expanded the rollout of the Sustainable Apparel Coalitions(SAC)Higg Index Facility Environment Module(FEM)to cover our broader supply chain and increased visibility of our supply chains environmental performance data.We collected data from 273 Tier 1 facilities,representing 92%of our supply chain spend an increase from 77%last year.Within the reporting facilities,229(87%of our business spend)have completed data verification by an SAC-approved third party.Facilities scored an average of 46 points across all sections,with an average of 59 points in the water section and 71 in the energy section.The expanded FEM rollout also covered 50 mills(up from 31 facilities last year),representing approximately 54%of our woven and knit fabric and sweater yarn production.A total of 48 mills(25 facilities in FY21)have completed third-party verification,with an average score of 58 points(49 last year)across all sections.The mills scored an average of 87 points in the energy section,70 points in the water section and 39 points in the chemical section.In the coming years,we will expand this effort to increase visibility of our supply chain environmental and chemical management performance data in our Tier 1 facilities,subcontracted processing facilities,and Tier 2 raw material manufacturing.QualificationSegmentations&Risk ManagementManagementPerformanceInnovationDevelopment&OnboardingPhaseoutOUR APPROACH TO SUPPLIER ENGAGEMENT2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|26Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewL I N K IN G SUPP LI ER CAPACI TY A N D PERFO RMANCE TO PU RC H ASIN G DECI S I ONSOur teams continue to assess supplier capabilities,capacities and performance,which in turn supports workers at the factory level.During FY22,we continued our efforts to develop a capacity management tool to collect and visualize global capacity,with an upcoming rollout plan for our Tier 1 Suppliers.This will help us avoid placing orders that might lead suppliers to subcontract without our authorization or to place pressure on workers to work excessive hours.To avoid making requests of our suppliers that could exceed their capacity to supply us on time,we plan orders early,keep factory capacity and capabilities under review and work to anticipate the need for new capabilities.In FY22,we fully integrated citizenship and sustainability into our SES and launched our Vendor Management System(VMS)a database that enables us to share information and opportunities with all Tier 1,subcontracted processing facilities and Tier 2 suppliers.We also integrated and evolved citizenship and sustainability key performance indicators into our vendor scorecard,with specific focuses on carbon,water and sustainable chemical management performance,and social and environmental targets,which now sit alongside other business-critical issues,such as quality.This allows us to transparently communicate our sustainability expectations,evaluate and monitor progress of our suppliers and strengthen focus and collaboration towards continuous facility-level improvement.We work to support our suppliers by clearly communicating expectations and leveraging forums where we enable suppliers to share challenges and learnings to develop a common understanding of our requirements.In light of pandemic-related travel restrictions in FY22,we continued the frequency of online webinars and meetings to engage suppliers on key issues.We also organized multiple weekly sustainability office hours to stay connected with our suppliers and discuss their input and questions related to our sustainability initiatives and launches.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|27Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewProtect the EnvironmentIN TH IS SECTIONClimate 29Water Stewardship 35Waste Management 39Chemical Management 43FPO IMAGEThrough scalable innovation and strong partnerships,we are working across our supply chain to reduce our climate and water impacts and avoidwaste.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|28Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewClimateWe are committed to playing our part to address the climate crisis by reducing greenhouse gas emissions across our supply chain to a level consistent with reaching global net zero emissions.Achieve net zero GHG emissions from a FY20 base yearReduce absolute Scope 1,2 and 3 GHG emissions by 30%(SBTi-approved)compared to a FY20 base year Power our owned and operated offices,distribution centers and stores with 100%renewable electricity2030 GOAL2025 GOAL2040 GOALOur Climate StrategyOur GHG reduction goal was approved by the Science-Based Targets Initiative(SBTi)in June 2020.This goal is in line with GHG reductions required to keep global temperature rise to 1.5C for Scope 1 and 2 and well below 2C for Scope 3.We plan to increase the ambition of this 2030 target alongside our industry to align with a 1.5C scenario across Scope 1,2,and 3.Beyond meeting our 2030 emissions reductions goals,we intend to achieve net zero GHG emissions by 2040.We plan to seek SBTi approval for our new 2030 target and our net zero target in calendar year 2022.To accompany these commitments,we published a Net Zero Commitment Statement that details how we will achieve these targets.Achieving and sustaining net zero emissions will require adoption of low-and zero-carbon practices throughout our supply chain.As we develop and refine our roadmap to achieving net zero by 2040,we have identified the strategies that will be most important to reach this target.These strategies include the electricity used in our operations,energy used by our suppliers,how we transport our goods,the raw materials in our products and the circular products and experiences we offer to customers.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|29Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur industry collaborates to address many of the decarbonization challenges we face,including the transition to renewable energy across our supply chains and enabling a more circular economy.We participate in many of these organizations,including RE100,UN Fashion Industry Charter for Climate Action,the G7 Fashion Pact,Clean Energy Buyers Alliance and the Sustainable Apparel Coalition.We have also voiced our support for bold U.S.climate policy action to ensure the transition to a low-carbon world.To make our Company more resilient to evolving climate-related risks,we developed a cross-functional Climate Risk Task Force.The Task Force meets semiannually to identify and describe key climate risks,communicate climate risks to key stakeholders including our leadership team and the Board and ensure key actions are being taken to address risks.We align our climate risk disclosures with the recommendations of the Task Force on Climate-Related Financial Disclosure(TCFD),as summarized in the TCFD Index of this report and our annual CDP Climate response.Continuing trends from last year,the lingering business disruptions from COVID-19 are reflected in our overall carbon footprint,as our absolute emissions decreased by 32%in FY22 from our FY20 baseline.These changes are driven by production volumes decreasing by over 25.6%compared to FY20,which contributes significantly to our Scope 3 emissions from manufacturing and raw materials.These changes in emissions are also driven by regular improvements to our carbon footprint methodology consistent with carbon accounting best practices,including collecting more complete data from our suppliers and updates to our underlying emission factors.We remain committed to implementing our GHG action plan for achieving our carbon reduction targets.FY22 GHG FOOTPRINT OVERVIEW:SCOPE 1,2,3*MTCO2e*Percentages may not add up to 100 due to rounding.*Consumer Product Use includes emissions from product washing,drying,dry cleaning and/or ironing.*Other Value Chain includes upstream energy production,waste generated in operations and licensed stores.Scope 1:Heating&Cooling(1%)Scope 2:Purchased Electricity(5%)Scope 3:Value Chain(94%)Purchased Electricity 69,291Manufacturing&Processing(Tier 1)153,244Manufacturing&Processing(tier 2)193,429Raw Materials 308,740Transportation&Distribution 132,716Consumer Product Use*211,636Product End of Life 14,941Business Travel&Employee Commuting 38,887Non-Merchandise Spend 108,962Other Value Chain*29,694Heating and Cooling 11,5821,273,122 MTCO2E2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|30Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewOur OperationsWere working to mitigate the operational contributors to our carbon footprint.Were investing in a number of renewable energy programs and initiatives to help transition to an energy future thats truly sustainable.R EN E WA B L E E NERGY&EN ERGY EFFI CI ENCYMoving to 100%renewable electricity for our owned and operated facilities is essential to meeting our GHG reduction goals.In FY22,6%of electricity used in our operations was from renewable sources,such as wind power.This is consistent with the share of renewable electricity used in FY21 and represents renewable energy attribute certificate purchases in Europe.We continued to implement our renewables strategy in FY22 focused on virtual power purchase agreements(VPPAs)in North America and Europe.We expect to sign our first VPPA in FY23.For any remaining renewable electricity needs,we will source renewable energy credits(RECs)and equivalent certificates.We also continued to improve the energy efficiency of our stores and offices.We are focused on reducing energy-intensive components like lighting,heating and cooling through energy management systems and the installation of more efficient technology.Over the last 12 months,we began to deploy new energy management systems at our North American retail stores.These systems allow us to more accurately track energy use and adjust our lighting,heating and cooling for greater efficiency.We also completed heating,ventilation and air conditioning system upgrades at 19 European stores to provide more efficient temperature control.Also,we are beginning to implement UV protection films at our stores to protect our products from excessive sun exposure while reducing the need for air conditioning in warmer months.We are working to install UV protection on windows at all stores in Europe by the end of FY24.1 We measure and calculate our emissions according to the World Resources Institute Greenhouse Gas Protocol,the industry standard and international tool for carbon accounting.For a more detailed methodology,see our ESG Supplement.2 Our FY22 carbon footprint has received third-party assurance according to the ISO 14064-3:2020 standard.For our full assurance statement,please see our Reports and Policies page.CARBON FOOTPRINT(SCOPE 1,2 AND 3)(MTCO2e)1FY20 FY21FY222Total Emissions1,861,7361,237,0171,273,122Scope 1 Emissions 16,24814,66111,582Scope 2 Emissions90,38078,30569,291Scope 3 Emissions1,755,1071,144,0311,192,249Carbon Intensity (MTCO2e/$million revenue)302.24281.09 204.73TOTAL SCOPE 3 GHG EMISSIONSPurchased goods and services64%Fuel-and energy-related activities2%Upstream transportation and distribution9%Employee commuting3%Downstream transportation and distribution2%Waste generated in operations1%Business travel1%Use of sold products18%End of life treatment of sold products 1%Franchises1%TOTAL SCOPE 3 GHG EMISSIONS1,192,2492022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|31Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewBy the end of FY24,all our retail stores in North America and Europe will be equipped with efficient lighting.We are also initiating a full LED retrofit at our North Carolina distribution center campus that is expected to begin installation in FY23.Our Supply Chain In FY22,we increased our engagement with our manufacturing partners to ensure carbon footprint reduction is fully integrated into their strategic roadmap.We began to invest in technical support for our partners to develop decarbonization strategy,set targets and implementation plans that align with the industrys timeline and ambition level.We believe this is a critical step to unlock long-term visibility for our partners and further align on our mutual climate and business trajectory.CA R B ON L E A DE R SH IP PRO G R AMIn FY22,we continued our partnership with the Apparel Impact Institute(aii)to roll out the Carbon Leadership Program within our supply chain.We conducted a supply chain carbon emission analysis prior to the roll out to identify priority facilities to develop a decarbonization pathway.Through the Program,we invested in technical support for each manufacturing facility to develop their bespoke 2025 and 2030 carbon and water reduction roadmaps and clear action plan with near-,medium-and long-term priorities that align with broader industry ambitions and best practices.We enrolled 24 fabric mill and vertical facilities(those with both material and finished goods production in the same location),representing approximately 45%of our raw material business spend,and nine strategic finished goods facilities into our first cohort of the Program.In FY22,the nominated facilities have set carbon reduction targets between 14 to 78%by 2030 against their 2019 baseline.Based on the developed roadmaps for the nominated facilities,it is estimated that the aggregate annual carbon and water savings at the facility level will reach 800,000 tons of CO2 equivalent and 8 million m3 of water,respectively,by the end of the decade.We will continue to expand the rollout of the program in our supply chain and work closely with our suppliers to track progress and support them in capability building and collective action programs that help overcome obstacles in implementing their action plan.100 stores in North America,Europe and Asia were retrofitted for energy-efficient LED lighting,as we continued installation at new stores in FY222022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|32Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewM A N UFACTURI NG&P RO CES S I NGIn FY20,we enrolled five Tier 2 fabric mills in the Aiis Mill/Impact Program to help reduce their overall environmental impact,including carbon and energy use.In FY22,they completed an 18-month program focusing on efficiency and optimization.On average,the facilities completed 90%of all recommended measures,including 46 projects in total with an average investment payback period of 7.9 months.Through the completion of these optimization projects,our facilities achieved an estimated annual total savings of:679,637 m3 of water 80,489 tons of steam 11,299 MWh of electricity 2,467 tons of coal 1,541,666 tons of natural gas 42,692 tons of CO2TR A N SP ORTATION&DISTR IBUT I O NOur Scope 3 footprint includes emissions from product transport,such as train,ship and air freight.To mitigate cost and environmental impact,we prioritize efficiency when choosing how to transport products to our distribution centers.We only allow vendors to deliver products by air in rare circumstances,such as when production does not meet delivery deadlines and there is a risk to keeping our promise to our customers.1 Inbound shipment from factory to global point-of-receipt managed directly by Ralph Lauren.AIR FREIGHT1FY19FY20FY21FY22Air Freight(%of shipments)5.8%3.8%6.7.5%In FY22,air freight managed directly by Ralph Lauren was 14.5%compared with 6.7%in FY21.This increase was due to a combination of factors,including efforts not to buy ahead and create excess stock and time constraints linked to factory closures or ocean shipping and pandemic-related port delays.In FY22,vendor-managed air accounted for 6.3%of total shipments,compared with 2.4%in FY21.Beginning this year,our logistics provider selection process includes a sustainability scorecard that measures candidates sustainability practices from the presence of a company sustainability strategy to performance measurement and continuous improvement plans.We are signatories to the Ocean Conservancys Arctic Corporate Shipping Pledge,committing us to not hire carriers to ship our products through Arctic Trans-Shipment Routes.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|33Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewBiodiversityBy 2024,we will set new goals aimed at protecting and regenerating nature in alignment with forthcoming comprehensive Science-Based Targets for Nature guidance.Long-term,we are working to reduce our impact and regenerate the natural ecosystems in our supply chain,where possible.To date,we have established goals and strategies that address many aspects of the target areas already identified in the initial Science-Based Targets for Nature guidance.For example,as part of our membership in the Fashion Pact,we are participating in working groups that are creating a framework to address biodiversity issues in the leather and cashmere supply chains.This work will leverage the insights provided by Textile Exchanges ALIGNMENT WITH AR3T FRAMEWORKAVOIDREDUCERESTORE®ENERATETRANSFORM GoalReduce absolute Scope 1,2 and 3 GHG emissions by 30%by 2030By 2040 achieve net zero GHG emissionsAcheive at least a 20%reduction in total water use across our operations and value chain by 2025By 2025,we will connect consumers with options to rent,repair and recirculate our products in select top citiesAchieve 100%sustainably sourced key materials by 2025By 2025,we will invest in scaling innovative technologies and regenerative practices to advance the circular economyPolicyForest Protection Policy,Animal Welfare PolicyProgramLeather Impact AcceleratorCanopyStyleECOFAST and Color on DemandWWF Water Stewardship Collective ActionU.S.Regenerative Cotton Fund11 Funded by The Ralph Lauren Corporate FoundationDevelop a biodiversity strategy and set goals aligned with Science Based Targets for Nature2024 GOALBiodiversity Insights Report,a resource enabling the apparel and textile industry to benchmark its impacts on biodiversity.We are also working with partners to promote the broader adoption of regenerative practices,particularly in cotton farming,and our Company is making investments to address deforestation in the bovine ranching sector in Brazil.The below table includes select illustrative examples of how some of our existing goals and initiatives align with the Avoid,Reduce,Restore&Regenerate and Transform(AR3T)framework created by the Science-Based Targets Network.Our business,and the communities we are a part of,depend on healthy,well-functioning natural ecosystems,and we know that protecting and restoring biodiversity is a critical component in addressing climate change.Over the next two years,we will refine and solidify our biodiversity strategy,setting new goals aligned with the forthcoming Science-Based Targets for Nature guidance.These goals will leverage and build upon many of our existing initiatives.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|34Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewWater StewardshipWe commit to reducing water consumption across our value chain and to safeguarding and preserving water resources in our communities.WATER STEWARDSHIP APPROACHAchieve at least a 20%reduction in total water use across our operations and value chain,compared to a FY20 baseline2025 GOALFreshwater is an essential resource for people and wildlife and a foundation for healthy ecosystems and thriving economies.Its also a resource that the apparel industry is heavily reliant on from growing cotton to dyeing and washing fabric.Our approach to water stewardship includes actions that address overall use and quality,and protecting watersheds and ensuring access.ConservationIn FY22,we continued to collaborate with World Wildlife Fund(WWF)to advance our conservation work and set a comprehensive strategy for water stewardship and water use reductions in our value chain.We are in the process of setting contextual water targets to better align our reduction goal with localized water challenges.In priority water-stressed locations,we are contributing in collective action projects and local partnerships to scale water use assessments and reduction strategies.Through our FY21 water risk analysis,we identified priority basins in our supply chain that are in great need for watershed conservation,reduced water consumption and improved community access to water.In FY22,our footprint was 11,087,765 m3 a 23.9%reduction compared to FY20.CON SE RVATIONSafeguard and preserve water resources where we operate through contextual water targets and collective action program implementation in priority geographies with high water stress.C OT TONSustainably source cotton and accelerate the adoption of regenerative farming practices.COMMU N ITYPartner with organizations focused on watershed health and community WASH(Water,Sanitation and Hygiene)solutions through The Ralph Lauren Corporate Foundation.This decrease was primarily driven by COVID-19-related business impacts,such as production volumes decreasing by over 25.6%compared to FY20,which contributes significantly to our supply chain water consumption.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|35Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCASE STUDYPartnering for Water Conservation in IndiaIn FY22,we joined WWFs Noyyal-Bhavani Collective Action Program to help address industry impacts on freshwater in the region in collaboration with WWF-India and two other corporate partners.The objective of the collective action program is to ensure that by 2030,the Noyyal and Bhavani sub-basins are healthy river ecosystems that ensure water security for people and nature.We nominated six manufacturing facilities in the area to identify opportunities to improve their efficiency in energy and water use,which in turn will help reduce overall impacts from manufacturing.This program aims to address shared basin challenges through:A strong foundation of science-based actions;Pilots to help inform policy making in the region,which is responsible for 90%of total cotton knitwear exports from India;and Clear key performance indicators which measure the impact on the landscape.Key achievements from the program include:Completed a cross-section and Aquatic Biodiversity survey,and installed a Water Level Recorder(WLR)in Moyar for e-flow assessment,which gives an overview of the flow regime to assess if the e-flow for aquatic biodiversity is met.Implemented pilots in select wetlands for community-led monitoring,water quality improvement and invasive species management by distributing water quality kits to citizen groups.A mutual understanding was reached to form a working group in Sulur Lake with local NGOs,industrialists and government officials.Completed a scoping study for 10 textile units in Tirupur and developed improvement plans for four units.255 participants attended eight training sessions under two modules Best Practices on Energy and Water Conservation.Completed River Health Assessments(RHAs)for three seasons in Noyyal and Moyar basins,which will facilitate the development of a river health card in the upcoming quarter.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|36Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewCottonAs part of our water stewardship strategy,we evaluated the impacts of cotton farming.We looked at our key cotton growing regions through the WWF Water Risk Filter to identify geographies with high risk for water scarcity.We also estimated total water use(rainfed and irrigated)in cotton agriculture the volume used is significant and our focus is on reducing water use in cotton production and increasing effectiveness of water use.A key driver of this is the adoption of regenerative farming practices that make better use of rainfall and irrigated land.These practices increase soil fertility,water holding capacity and carbon capture;reduce erosion and pollution runoff;and create more resilience against floods and droughts.Read more about our work to increase the adoption of more sustainable cotton.Community Essential to our overall water stewardship strategy is supporting watershed health through conservation interventions including wetland restoration,stakeholder engagement and the adoption of preferable land use management practices.We will invest in a number of water conservation programs in the coming year,and further our partnerships with local organizations focused on community access and water,sanitation and hygiene(WASH)solutions.In FY22,we submitted our first CDP water response(an unscored version of the questionnaire)with plans to increase our disclosures to a more extensive,scored version in the future.FU RTH E R WATE R ACCESS E FFO RTSWorldwide,one in three people do not have access to safe drinking water.To help end this disparity,we support organizations providing clean water sources for those in need.Through our continued partnership with GiveMeTap,we helped fund 18 incremental drinking water projects in rural Africa in FY22.We also donate at least$2 for every Polo-branded bottle sold on RalphL to help fund the installation of water pumps across rural Ghana.By FY2023 the program is expected to provide 36 water pumps in the Upper West region of Ghana benefiting more than 36,000 people.The Ralph Lauren Corporate Foundation has made several additional commitments to improve access to clean water and general water functions around the world.More information about these efforts can be found in Access to Clean Water.OUR FY22 WATER FOOTPRINTManufacturing&Processing:11,087,765 m3Owned&OperatedFacilities:263,541 m3Total:11,351,306 m3TOTAL OPERATIONS WATER USE BY FACILITY TYPE(M3)Office41,010Retail180,637Distribution Center41,895TOTAL FACILITY WATER USE263,5412022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|37Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewTOTAL SUPPLY CHAIN WATER USE(M3)1TOTAL SUPPLY CHAIN WATER USE BY SOURCE(M3)Municipal44.24%Produced/Process Water12.45%Rainwater0.15%Wastewater from Another Organization 4.18%Surface Water17.43%Groundwater21.20%General or Unknown Origin 0.34%Processing30bric Mill 43%Tier 1 Direct Facility27%1 Percentages may not add up to 100 due to rounding.WATER STEWARD S HI P I N O UR SUPPLY CHAI NWe are supporting our suppliers to improve their water reduction targets through the Carbon Leadership Program.In FY22,nominated facilities set water reduction targets ranging up to 72%by 2030 against their 2019 baseline.Other water stewardship initiatives in FY22 included:Continued our direct collaboration with manufacturers in improving water use efficiency.Since FY20,we have been working closely with our suppliers to adopt more water-efficient processing for our materials and product manufacturing.These transitions have helped our suppliers avoid an estimated 169,992 cubic meters of water use in FY22.Launched an open-source ECOFAST manual in collaboration with Dow to support faster adoption of an improved dyeing process.This effort aims to help the industry integrate new methods to reduce the amount of water,chemicals and energy needed to color cotton.Continued to reduce the use of water-intensive chemicals and processing in the production of our core Polo and Lauren denim products.For more information,see Chemical Management.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|38Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewWaste ManagementWe commit to integrating zero-waste principles across our business,focusing on reducing waste at its source and diverting waste from landfill through increased recycling,reuse and other methods.Aswe work to become a more circular business,were aiming to reduce excess inventory,keep materials in use for as long aspossible and minimize waste generated at our facilities.Achieve zero waste to landfill across our distribution centers1Achieve 100%recyclable,reusable or sustainably sourced packaging materials2025 GOAL2023 GOAL1 Using the Zero Waste International Alliance definition of zero waste,we will divert more than 90%of the waste generated at our distribution centers from landfill and incineration.Waste in Our OperationsAcross our distribution centers,offices and stores,we work to minimize waste and avoid sending materials to incineration or landfill,including excess inventory.In FY22,overall operational waste volumes returned to FY20 levels in line with the increase in business activities.We generated approximately 5,767 metric tons of waste at our distribution centers and diverted 88%of this from landfill on track to meet our 2023 goal.In our North America-owned distribution centers,we achieved a 92%diversion rate in FY22.We also collected detailed waste data for all of our third-party operated distribution centers in Europe and Asia.DISTR IBU TION CE N TE R SIn FY22,we worked with local recycling vendors to divert over 17,000 pounds of hangers from landfill at our North Carolina distribution center.In FY22,we conducted a waste audit of our North Carolina distribution center,identifying several operational improvements to increase waste diversion.As a result of one of these recommendations,in FY23,we plan to acquire plastic film balers to allow efficient collection and recycling for a greater share of the plastic waste generated at our facilities.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|39Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewO F F I C ES,SUPP LI ERS AND STORESWe are reducing the number of samples being created and shipped by working with suppliers to test their materials in-house,rather than sending samples to third parties.We are also increasing the use of digitization so suppliers can create new products virtually,reducing sampling components,color approvals and related transportation.We continued our partnership with FABSCRAP to recycle fabric trim and samples in our offices.Since initiating in 2020,weve recycled over 21,000 pounds of fabric waste and reused more than 7,500 pounds of fabric.Our sustainability employee resource group,Green Ponies,continued to play an active role in other office waste reduction efforts.In FY22,the New York-area Green Ponies team identified a local business,aNYbag,that collects and upcycles flexible plastic into tote bags.To address the limited options for plastic film recycling,they brought plastic waste from offices and retail stores.Green Ponies are currently exploring options for expanding this partnership in FY23.We are also exploring organic waste diversion for composting at our global headquarters in partnership with our building landlord.Managing Excess InventoryThe immense amount of textile waste created annually throughout the fashion industry is a systemic problem,and one were determined to help eliminate.Our Excess Inventory Management Principles standardize the steps we take to prevent our products from becoming waste.The principles are supported by a waste management hierarchy to guide our decision-making for inventory and commercial waste.PR EV E N TIN G E XCESS AT TH E S O URC EOur first step to reducing inventory waste is to prevent the production of excess products.Minimizing overproduction is a challenge across our industry.A key part of the solution is predicting product demand so we produce only what we need.We are working toward this by shortening product lead times and implementing agile production models.We are also applying intelligent buying techniques that better predict demand and match it with manufacturing.In FY22,we expanded a pilot project to minimize overproduction of wholesale orders in multiple markets.Using supply and demand balancing,we ensured wholesale orders occur only after confirmation of customer orders.By refining our sales models,we reduced production by approximately 267,000 units to avoid excess production.1 Comprehensive site-specific waste data was not available for all offices and stores.Waste data was modeled for these sites.WASTE GENERATED AT OUR FACILITIESMETRIC TONSDIVERSION RATEDistribution Centers 5,76788%Stores12,226 81%Offices127835%Total 8,27184%Prevent Excess at SourcePursue Expanded Sales ChannelsMaximize Product orMaterials Next LifeDonate for Positive ImpactRecycleDisposeMost preferredLeast preferredOUR EXCESS INVENTORYMANAGEMENT PRINCIPLES2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|40Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewSA L ES C H A N NELS EX PANS I ONS A N D M A XIM IZ ING A NEXT LI FE FO R PRO DUCTOnce we have offered our products at full price across our range of channels and regions,we consider alternative sales channels for unsold products within planned timeframes,including via our outlet stores and various clearance partners globally.Moving units between markets can also be an effective way of opening up new sales options for existing products.In FY22,we continued to transfer units globally,including moving units in Asia through clearance channels in Europe.After putting employee sale events on hold in FY21 due to the pandemic,we restarted in-person employee sales globally in FY22.Employee sale events in North America,Europe and Asia allowed us to divert 72,000 units of excess inventory from disposal.D O N ATE FO R P OS I TI VE I MPACTWe advanced Ralph Laurens global donation principles by elevating partnerships that can meet both the needs of the communities our workforce represents and communities of concern and in need.We established partnerships with 501(c)(3)or charity-equivalent product donation aggregators.These organizations help ensure that we deepen our impact and expand our reach to those in need.Our primary partners for this work are Delivering Good and World Vision.R ECYCL IN GRecycling products at scale continues to be a technical challenge for our industry,particularly for apparel with blended fabrics and non-textile products like footwear and handbags.We are finding more opportunities to recycle excess products by exploring new partnerships and innovations.In FY22,we expanded partnerships with recyclers in North America and Europe and initiated regular recycling throughout the year.We also continued an upcycling pilot project in North America to apply advanced technologies for decoloring cotton textile waste to allow for spinning into recycled fabric and yarns.DISP OSA LOnce all other options have been exhausted,our last resort is product disposal or destruction.We try to avoid this wherever we can and prioritize waste-to-energy disposal methods where available.We continue to ramp up our donation and recycling partnerships to avoid the need for disposal.Ultimately,we aim to cease this option altogether.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|41Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewSU STA IN A B L E PACK AGI NG Environmentally responsible packaging is an essential part of a circular future.By 2025,100%of our packaging material will be recyclable,reusable or sustainably-sourced,which includes packaging made from post-consumer or post-industrial recycled content,or is FSC-certified(or equivalent).In FY22,82%of our packaging volume met at least one of our sustainable packaging criteria.Additionally,we transitioned to a regular,standardized reporting process for our suppliers to allow us to track sustainable aspects of our packaging across brands,packaging types and regions throughout the year.Our Forest Protection Policy supports our 2025 goal,describing our commitment to responsibly source any fabric,pulp and paper used in packaging.We collaborate with Canopys Pack4Good initiative,evaluating paper-based alternatives to plastic packaging and ensuring that we are responsibly sourcing these paper alternatives.We continue to use FSC-certified paper for our hangtags for core items and are developing new hangtags for other items using paper with the same certification.In FY22,we made significant progress toward eliminating non-essential decorative tags by leveraging our digital development portal.We will shift all regional polybag suppliers to using 100%recycled content in our plastic polybags by the end of FY23.This is an interim milestone as we work to reduce the need for polybags overall.Further,were continuing our work with partners and innovators through the Fashion Pacts Oceans pillar to identify and test paper-based polybag alternatives in our global supply chain that meet our performance requirements while also being recyclable at scale.We are also currently working to reduce use of individual unit polybags in sales samples sent to offices and showrooms by shipping samples in master bags.Through RalphL,our reduced packaging option gives customers the ability to remove plastic or paper inserts,hangers,garment bags,promotional materials and paper invoices from their orders.In FY22,we continued to remove and recycle all of the polybags from reduced packaging orders,which represented 14%of all orders placed through RalphL.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|42Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewChemical ManagementAs we monitor and reduce hazardous chemical use and discharge,our ultimate goal is to eliminate all hazardous chemicals from our product manufacturing.Eliminate the use of hazardous chemicals in our supply chain2025 GOALChemicals play an important role in the creation and manufacturing processes of our products.We have a responsibility to ensure the chemicals used to make our products are safe for people and the environment.Our Sustainable Chemical Management Policy outlines our approach in assessing the impacts of the chemicals in our supply chain and in partnering with our manufacturers in responsible chemical management practices.ZERO DISCHARGE OF HAZARDOUS CHEMICALS PROGRAMMEOur work in sustainable chemical management is built upon a collaborative foundation among brands in our industry,their supply chain and chemical producers.As partners in the Zero Discharge of Hazardous Chemicals(ZDHC)Programme,we collaborate with peers and experts to eliminate the use and discharge of hazardous chemicals across our apparel supply chain.We adopted the ZDHC Manufacturing Restricted Substances List(MRSL)in FY20 to align with industry standards and help our suppliers track and report on all chemicals used to develop and manufacture our products and to prioritize the removal of harmful chemicals.In FY22,we expanded our chemical transparency tool to cover the broader supply chain and increase visibility of chemical products used in our manufacturing as well as their conformance status with the MRSL.We gained transparency of chemical inventories and MRSL conformance status of manufacturing facilities that represents 72%of our supply chain spend,compared to 31%last year.Of the chemicals reported,82%conform with the MRSL,up from 59%last year.We established visibility to the chemical use of our Tier 2 manufacturing facilities that represents 30%of our woven,knit,and sweater material business spend.1 We utilize the Chemical Management section within the Higg Index Facility Environmental Module(FEM)to assess the operational aspect of chemical management at the facility level.Based on the third-party verified assessment,our Tier 1 and Tier 2 suppliers scored an average 24 and 39 points in the Chemical Management section,respectively.In order to confirm the MRSL substances are not intentionally used,we require manufacturing facilities with wet processing to test wastewater against the ZDHC Wastewater Guidelines and share results on the ZDHC Gateway portal.Fifty seven percent of the Tier 1 facilities and 29%of the Tier 2 facilities by business spend have performed wastewater tests in accordance with the Guidelines.1 Eighty four percent of the facilities that tested comply with the ZDHC requirement,and out of the substances screened,99.9%comply with the ZDHC standard.1 The number is a self-reported number by our Tier 2 raw material suppliers2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|43Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewWe incorporated the chemical transparency,MRSL conformance status and wastewater test results into our Supplier Engagement Strategy(SES),which allows manufacturing facilities to be evaluated and scored based on their performance in sustainable chemical management practices.It also helps us build transparency in tracking progress and encourages continuous improvement at the facility level to ensure progress is made in the adoption of safer chemistry to achieve our goal of full MRSL conformance and elimination of hazardous chemicals by 2025.We analyzed our suppliers data and identified common challenges in the implementation of sustainable chemical management practice at the facility level.While the facilities have a basic understanding of chemical applications,we identified the need to build up their capability in sustainable chemical management practices to align with industry standards and best practices.In order to help close these knowledge gaps,we partner with a ZDHC-approved training provider to develop and deliver a customized capability building program for suppliers that provides practical technical guidance and industry best practices.The training program is deployed on a rolling basis,starting with our strategic and key suppliers,top wet processing facilities and top mills.Each supplier nominates a relevant representative(often facility chemical and technical managers)to take the training and act as a leader to effectively drive the implementation of sustainable chemical management practices at their manufacturing facilities.We also organize periodic webinars in collaboration with the ZDHC-approved chemical inventory management tool,which helps to strengthen our suppliers capabilities of self-monitoring their chemical inventory and MRSL conformance status.All of these efforts empower our suppliers to self-monitor their chemical use,which helps address issues at the source and guides conformance with the MRSL.Further,it also helps identify chemicals in their inventory that are not MRSL-certified,therefore becoming a top priority for phase-out.ELIMINATION OF PFAS In FY22,we continued to focus on accelerating the elimination of PFAS(perfluoroalkyl and polyfluoroalkyl substances)in accordance with our Sustainable Chemical Management Policy.Over the last two fiscal years,weve collaborated cross-functionally with our manufacturing partners to successfully develop PFAS-free water repellent materials,effectively phasing out the chemical.We are in the final phase and on track for full elimination by the end of calendar year 2022.We recognize that an industry-wide elimination of PFAS requires a collaborative effort.In FY22,we joined the PFAS Movement,a joint initiative for corporations organized by ChemSec with a clear mission to drive stricter regulations on PFAS chemicals and encourage corporations to eliminate all nonessential PFAS use.We have eliminated the use of pumice stones in all of our denim manufacturing for Polo and Lauren Brands.Additionally,the majority of our Polo and Lauren denim washes have transitioned away from the use of potassium permanganate(PP).We are working closely with our vendors in India and Indonesia to convert all washes from conventional washing methods using stone and PP to synthetic stones and PP alternatives.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|44Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewChampion Better LivesIN TH IS SECTIONDiversity,Equity&Inclusion 46Employee Well-being 52Community Engagement&Philanthropy 53Rights&Empowerment in the Supply Chain 59FPO IMAGEWe aim to create a more equitable world and positively impact the lives of people in our workforce,communities and supply chain.2022 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|45Create With IntentProtect the EnvironmentChampion Better Lives2022 ESG Supplement Introduction&OverviewDiversity,Equity&InclusionWe unite and inspire the communities within our Company and those we serve by amplifying voices and perspectives to create a culture of belonging,equality,inclusion and fairness for all.Our DE&I strategy spans three pillars:Talent Cultivate diverse teams,ensuring that fostering a culture of inclusion and belonging is a priority enterprise-wide,and elevate underrepresented talent into leadership ranks.Engagement Enable open dialogue and create spaces for the amplification of diverse voices and perspectives with an emphasis on psychological safety.Offer opportunities to acknowledge,celebrate and discuss our unique differences through heritage events and structured programming.Education Build a Company culture centered around trust,inclusivity and belonging through educational and awareness programming and content sharing.Establish and enforce structured education and DE&I training participation with an emphasis on accountability fo
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2021 Global Citizenship&Sustainability ReportGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT2Dear Stakeholders,The past year will forever be associated with change and challenge,but it has also been a time to focus on what matters most.The convergence of the global pandemic,climate crisis and call to action to dismantle systemic racism has been a catalyst for businesses around the world to focus and accelerate their progress toward a more equitable and sustainable future.At Ralph Lauren,our Purpose to inspire the dream of a better life through authenticity and timeless style anchors our journey to Design the Change;our teams drive our work forward;and we scale our impact through collaboration and partnership.Amid all the challenges we faced this year emerged a spirit of resilience,dedication and passion that has helped us to not only make progress on our goals and commitments,but accelerate our momentum.As the world evolves,we will continue to listen,learn and challenge ourselves to lead and deliver on our Purpose in a way that creates value for all stakeholders.While there is still more work to be done,our impact can be seen through some of the strides we made this year,including:Establishing a clear roadmap to achieve net zero greenhouse gas emissions by 2040;Taking action to address racial inequity,both inside our Company and as a voice and leader in our industry;Launching our comprehensive circularity strategy;Launching and open-sourcing the first phase of Color on Demand,a revolutionary platform that more sustainably dyes cotton;Increasing our overall transparency by sharing expanded workforce diversity data,climate impact data and factory disclosures;and Incorporating key ESG metrics into our executive remuneration,from Fiscal 2022 onwards.For more than 50 years,the notion of timelessness has defined our business and our brand and this reverence for things that last extends to our culture,our communities and the wider world.That is why we are committed to accelerating and sharing our progress designing the change needed for a better tomorrow.A Messagefrom Our Chairman and Our CEORALPH LAURENExecutive Chairman and Chief Creative Officer PATRICE LOUVETPresident and Chief Executive Officer GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT3OUR YEAR IN REVIEW CREATE TIMELESS STYLEResponsible DesignCircularity Sustainable MaterialsSustainable Spaces Chemical Management PROTECT THE ENVIRONMENT Carbon&Energy Water Stewardship Waste Management Sustainable Packaging CHAMPION BETTER LIVESDiversity&InclusionCommunity Engagement&Philanthropy Worker Empowerment&Well-Being SUPPLIER ENGAGEMENTFACTORY DISCLOSURECOLLABORATING FOR IMPACT2021 ESG SUPPLEMENT Global Reporting InitiativeSustainability Accounting Standards BoardTask Force on Climate-Related Financial DisclosuresOur Carbon FootprintOur Water FootprintABOUT THIS REPORT4891011151617 18212325 2627343742444548 495660616264Table of ContentsGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OUR YEAR IN REVIEW4Our Year in ReviewOur purpose has always been to inspire the dream of a better life through authenticity and timeless style.This purpose is more relevant today than ever before as people all over the world reflect on the challenges of the past year and hope for a better future.Through our citizenship and sustainability strategy,Design the Change,we met these challenges with action,making strides across each of our strategy pillars:Create Timeless Style,Protect the Environment and Champion Better Lives.Below is a snapshot of our FY21 progress.FY21 Progress CREATE TIMELESS STYLE PROTECT THE ENVIRONMENT CHAMPION BETTER LIVES Learn moreLearn moreLearn moreLearn moreLearn moreLearn moreLearn moreLearn moreLearn moreLearn moreSustainable design goal achieved for FY21 with all design,production and merchant teams receiving training on sustainable,circular,inclusive and culturally aware design Circular strategy was launched in FY21 to guide us in designing for circularity,establishing circular experiences for consumers and advancing a circular product economy33%of units met our sustainable material criteria on track to meet our goal of 100 percent sustainable key materials by 2025 Learn moreLearn more21.9 million plastic bottles were repurposed through our use of recycled polyester fibersNet zero goal was established to achieve net zero emissions by 2040 54%of our packaging volumewas recyclable,reusable or sustainably sourced,on track to meet our 2025 target of 100%of waste was diverted from landfill at our owned distribution centers,on track to meet our target of zero waste to landfill at our distribution centers by 2023Color on Demand platform was launched with the clear ambition to deliver the worlds first scalable zero wastewater cotton dyeing systemAt least 20%of our Global Leadership Teamwill be from underrepresented racial and ethnic groups by 2023$20M in combined charitable contributions from the Company and the Foundation 19,800 workers empowered across our supply chain,bringing the total number of workers with access to our empowerment and life-skills programs to over 39,000D&I data transparency expanded in FY21 as part of our ongoing efforts to drive diversity,inclusion and equity within our Company GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OUR YEAR IN REVIEW5Design the ChangeDesign the Change is our strategy to create positive social and environmental impacts across our Company,our industry and society.Through this strategy,were creating a more sustainable future in three key areas:CREATE TIMELESS STYLE:Creating more sustainable products is afoundation for timeless,authentic,lasting style.We design our products with intention and circularity in mind,and we partner with our suppliers to source more sustainable materials without compromising quality.PROTECT THE ENVIRONMENT:Through ongoing innovation and strong partnerships,we are working across our value chain to reduce our climate and water impacts and avoid waste.CHAMPION BETTER LIVES:We aim to create a more equitable world and positively impact the lives of people in our workforce,communities and supply chain.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OUR YEAR IN REVIEW6Achieve a 30 percent reduction in absolute Scope 1,2 and 3 GHG by 2030,compared to a FY20 baselinePower our owned and operated offices,distribution centers and stores with 100 percent renewable electricity by 2025Achieve at least a 20 percent reduction in total water use across our operations and value chain by 2025Achieve zero waste to landfill across our distribution centers by 2023Achieve 100 percent recyclable,reusable or sustainably sourced packaging materials by 2025All of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally aware designAchieve 100 percent sustainably sourced key materials by 2025100 percent of animal-derived materials will be certified toan animal welfare standard and traceable by 2025Eliminate the use of hazardous chemicals in our supply chain by 2025Five of our iconic products will be Cradle to Cradle CertifiedTM by 2025Provide resale and recycling experiences for our consumers by 2022Produce 100 percent recycled cotton products of high quality by 2025Achieve net zero greenhouse gas(GHG)emissions by 2040Have at least 20 percent of our Global Leadership Team be from underrepresented racial and ethnic groups by 2023Achieve gender parity with equal representation in leadership positions at the VP level and above Roll out our Wage Management Strategy to all of our strategic and key suppliers to address fair and timely compensation for factory workers by 2023Our Global Citizenship&Sustainability GoalsWe drive progress across our Design the Change pillars through a set of supporting goals.Internal working groups define and implement our work across each pillar.Below is a summary of our progress through FY21,with more details throughout relevant sections of the report.CREATE TIMELESS STYLE PROTECT THE ENVIRONMENT CHAMPION BETTER LIVES Achieve 100 percent wood substrates used in key elements of new store interiors FSC Certified,repurposed or recycled by 2025Make empowerment and life-skills programs available to 250,000 workers across our supply chain by 2030Achieve a 25 percent increase of women in factory leadership that seeks to create a path to parity by 2025Increase employee volunteer hours by 25 percent compared to a FY20 baseline by 2025ON TRACKACHIEVED FOR FY21ON TRACKON TRACKON TRACKON TRACKON TRACKACHIEVED FOR FY21ON TRACKON TRACKON TRACKON TRACKON TRACKNEWNEWNEWNEWNEWN EWN EWGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|OUR YEAR IN REVIEW7Global Citizenship&Sustainability GovernanceGlobal Citizenship&Sustainability governance is integrated across all levels of our organization.Our Board of Directors(the Board)is responsible for formal governance of Global Citizenship&Sustainability.The Board receives progress updates at least once a year and reviews our annual Global Citizenship&Sustainability Report.Various Board committees have additional responsibilities:The Nominating,Governance,Citizenship&Sustainability Committee oversees our environmental,social and governance(ESG)risks and opportunities.The committee receives quarterly updates;reviews initiatives,goals and policies;and makes recommendations to the Board on ESG matters.Each quarterly update includes a detailed analysis on a specific ESG topic.The Finance Committee and the Nominating Committee advise on the incorporation of goals into our corporate strategy and engagement of business initiatives that influence corporate citizenship and sustainability.The Audit Committee assesses ESG risks as part of its overall Enterprise Risk Management review.The Compensation Committee considers performance against Company ESG key performance indicators in their compensation decisions.Our Global Citizenship&Sustainability Senior Steering Committee is chaired by our Chief Product and Sustainability Officer and includes leaders from across the Company.The committee meets monthly to prioritize our approach and allocate resources.Committee members also define,track and champion our citizenship and sustainability work,including diversity and inclusion,with their teams.PRIORITY MATERIAL ISSUES Chemical Use&Discharge Climate Change Diversity&Inclusion Employee&Worker Health,Safety&Well-Being Raw Material Sourcing&Traceability Sustainable Product Design&Packaging Waste Management Water StewardshipMATERIALITY AND STAKEHOLDER ENGAGEMENTWe regularly conduct materiality assessments to help identify and prioritize the citizenship and sustainability issues,risks and opportunities that matter most to our business and stakeholders.Our assessments are conducted by a third party and include extensive engagement with internal and external stakeholders,including employees,selected licensees,suppliers,partners,NGOs and consumers.Our most recent assessment,conducted in FY19,informed the development of our Design the Change strategy,including our priority material issues listed below and associated goals.Our next formal assessment will be conducted in FY22.We also maintain ongoing stakeholder engagement throughout the year to inform strategies,priority issues and goals in-between our formal materiality assessments.We also communicate regularly with investors on environmental,social and governance issues,typically through the regular course of investor meetings or one-off meeting requests.We invite the public to provide feedback on our sustainability program through GlobalCorporateCommunicationsRalphL.Create Timeless StyleCreating more sustainable products is afoundation for timeless,authentic,lasting style.We design our products with intention and circularity in mind,and we partner with our suppliers to source more sustainable materials without compromising quality.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE8All of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally aware designONGOING GOALWe commit to embedding sustainability,inclusivity and cultural awareness and celebration into the products and services we design.Responsible DesignWe challenge ourselves to think differently about each stage of the design and development process.This helps us create innovative products with timelessness,authenticity and quality at their heart.In FY21,we launched our Design with Intent program,which aims to identify and pursue opportunities to be intentional and impactful with all that Ralph Lauren representsfrom product inception to marketing and every point along the customer journey,including store design and e-commerce.Our Design with Intent committee,with more than 60 members globally,drives our work in this area by bringing together diverse voices to inform the choices we make and the stories we tell.In FY21,we also rolled out e-learning on sustainable product design and cultural awareness to all our design,production and merchant teams globally,meeting our goal for FY21.ACHIEVED FOR FY21Our Approach to DesignWe strive to create and communicate with respect and we continue to educate our teams and celebrate the cultures and influences that inspire our brands.Our designs are inspired by the world around us,including the landscapes,people and places we see each day.The breadth and reach of our brands across generations and cultures creates a style that is authentic,timeless and truly personal.We take seriously our responsibility to use the inspiration that captivates our imagination in a way that is culturally aware and appropriate.Our Cultural Awareness Guidelines define our approach.We update these annually and distribute them to all teams with a role in design,advertising and marketing.We support our teams to apply the guidelines in practice with our cultural awareness educational program;this program is mandatory as part of our new hire onboarding process for all creative,design,marketing and advertising teams.Existing teams receive annual training and special workshops to keep current in this space.In FY21,we expanded our Cultural Awareness Advisory Council to support our organizations end-to-end processfrom concept through to campaignensuring our creators have ongoing access to diverse expertise and insight.The Cultural Awareness Advisory Council is made up of 30 membersan international and diverse group of Ralph Lauren Corporation employees.Members include representatives from different teams around the world,such as Brand,Design,Marketing,Social and PR,Digital,Corporate Communications,D&I,RL Library and Legal.The Council also includes advisory members from the D&I Employee Resource Groups,providing guidance and feedback specific,but not limited to,multicultural experiences,race,ethnicity,gender,LGBTQIA and disability.We seek external advice and input to help us respect and support the many sources of inspiration we represent through our brand.Our advisors include the Smithsonian National Museum of the American Indian and the Johns Hopkins Center for American Indian Health.As a member of the Nest Coalition for Craft&Culture,a group of peers committed to engaging responsibly and creatively with the global handcraft community,were working to convene a virtual event program focusing on capacity building and market access for U.S.-based Indigenous Artisans.Cultural AwarenessGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE9Our Circular StrategyWe are committed to responsible design and sourcing principles to create more sustainable products that are worn,loved and made to last.Anchored in this commitment and in our long-standing vision of timeless style,in FY21 we launched a comprehensive circular strategy.The strategy will inform our product development and support more circular systems in our industry by designing out waste and pollution,keeping products and materials in use and regenerating natural systems.Building on our current sustainability work,our new circularity strategy and associated targets will focus on three pillars:CREATE CIRCULAR CONSUMER EXPERIENCES Building on the launch of our first subscription apparel rental initiative,The Lauren Look,we will offer more circular experiences for consumers.We will expand our product offerings on re-commerce opportunities,increase recycling and upcycling options,as well as enhancing vintage selling capabilities.DESIGN PRODUCTS FOR CIRCULARITY We will review select iconic productsincluding best sellers such as polo shirts,chinos,denim and sweatersfor longevity and circularity using the holistic Cradle to Cradle(C2C)standardTM.We will apply our learning to bring circular design principles to other key product categories in the future.CircularityFive of our iconic products will be C2C CertifiedTM2025 GOALADVANCE A CIRCULAR PRODUCT ECONOMY To help our industry meaningfully shift from a linear to a circular product economy,we will continue to invest in scalable technologies that elevate the quality of recycled materials to match the quality and feel of virgin material.In FY21,we invested in Natural Fiber Welding,Inc.,a leading sustainable material science start-up that is scaling a new industry standard for natural fiber recycling.2025 GOALProduce 100 percent recycled cotton products of high qualityBegin providing resale and recycling experiences for our consumers2022 GOALGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE10100 percent of our key materials1 will be sustainably sourced by 2025100 percent of animal-derived materials will be certified to an animal welfare standard and traceable by 2025OUR KEY MATERIAL GOALS ARE:100 percent sustainably sourced cotton by 2025 100 percent recycled polyester by 2025 100 percent Responsible Wool Standard certified or recycled wool by 2025 100 percent of viscose will be sourced and verified through CanopyStyle audits by 2025 100 percent of leather will be traceable and verified to animal welfare and land management standards,or covered by Impact Incentives and 100 percent of our tanned leather will be Leather Working Group certified by 2025 100 percent Responsible Down Standard or Traceable Down Standard certified down and feathers by 2023 100 percent Sustainable Fibre Alliance certified(or equivalent)or recycled cashmere by 20252025 GOAL2025 GOALWe commit to using more materials in a way that results in positive social and environmental outcomes,protects biodiversity,advances animal welfare and continuously improves the traceability of our raw materials.Sustainable Materials1 Key materials include cotton,polyester,viscose,leather,wool,cashmere and down.Our focus on quality and authenticity drives us to look for more sustainable raw materialsalways with durability,craftsmanship and performance in mind.Our sustainable material strategy is driven by our ethos of creating positive environmental and social outcomes through the products we make.We continue to explore new innovations in material development that enable us to scale positive impacts.We are increasingly evaluating how our material sourcing can address more complex social and environmental challenges.Preferred fiber certifications help drive best practices and verify sustainability claims.We recognize the importance of supporting fiber production that contributes to ecosystem functioning and soil health to support a sustainable and profitable fiber industry.A key aspect of our sustainable materials strategy is to grow the adoption of regenerative agricultural practices in our leather and cotton supply chains through partnerships and direct-to-grower sourcing models.COMMITTING TO NATUREWe are committed to deploying nature-based solutions through our business operations and product supply chains.To do this,engaging in collective industry action will be essential.We are working with the G7 Fashion Pact to restore biodiversity,participating in Textile Exchanges biodiversity benchmark as we develop a biodiversity strategy and setting commitments to science-based targets for nature and zero deforestation.Nature-based solutions are also tightly tied to our raw materials sourcing and net zero goals as we look to accelerate the adoption of regeneratively grown materials and further support farmers,who are drawing down carbon,through carbon credits.Guided by our sustainable raw material road map,we are working toward our 2025 goals for overall sourcing and specific material types.In FY21,we continued to increase transparency and traceability of our material use by:Beginning to map our supply chain to enable visibility of material origins across each step of the textile and garment supply chain to inform a robust sourcing strategy,provide assurance of sustainability impacts and mitigate risk.Developing systems to measure the total volume(by weight)of sustainable materials as a portion of total raw materials sourced,which will enable us to systematically track their sustainable attributes.In FY21,33 percent of our units produced met our sustainable material criteriaup from 11 percent in FY20.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE11FY21 MATERIAL USE11 FY21 percentages are based on units,not weight of raw materials.Percentages may not add up to 100 due to rounding.2 Primarily includes additional materials used in our accessory and footwear products.WoolCashmereLeather/SkinsSilkAnimal Derived0.3%1.0%0.2%1.9.2%6.5%1.6%0.7%6.6%3.3%Animal DerivedOther 2ViscosePolyamide(nylon)PolyesterCottonProgress Toward More Sustainable MaterialsCOTTONCotton accounts for more than 80 percent of our total material use.We are committed to sourcing cotton in a manner that prioritizes soil health,utilizes water efficiently,minimizes chemical inputs and supports workers rights and farmers profitability.Aligned with our FY21 goal,we continued to transition core productssuch as polo shirts,knits,chinos and shirtsto sustainably sourced cotton.In FY21,we sourced more than 9,000 metric tons of cotton lint sourced as Better Cotton,a 42 percent increase from last year.As a Better Cotton Initiative member,we support its mission to address the environmental,social and economic issues associated with growing cotton.Organic cotton fiber makes up less than 1 percent of cotton grown annually.Farmers who want to switch from conventional to certified organic farming face financial challenges and other barriers and must use organic farming methods for a two-to three-year transitional period before achieving certification.Toward our 2025 goal,we will introduce transitional cotton into our collections to support farmers during this period and to help drive the growth of organic cotton supply globally.We also aim to increase the use of U.S.-grown cotton in our products.To support increased sourcing of sustainably grown cotton from the U.S.,we are working at the industry and farm levels to support healthy soils through regenerative practices,such as cover crops and reduced tillage,while increasing farmer profitability.HARNESSING INNOVATION TO SCALE MORE SUSTAINABLE COTTONAs part of our new circular strategy,we are working to scale technologies that will elevate the quality of recycled materials to match that of virgin material.For example,through our investment in Natural Fiber Welding,Inc.,in FY22 we will launch first-of-its-kind performance apparel utilizing Clarus cotton yarn.Clarus is made using an innovative process that welds short fibers into longer durable fibers to create high performance materials with the drying power and breathability often associated with synthetics.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE12POLYESTER AND NYLONWe are working to phase out virgin sources of polyester and nylon and switch to recycled options or natural fibers.Polyester is a synthetic material produced from fossil fuels.It currently accounts for 6.5 percent of our total material use,and in FY21,23 percent of our polyester was recycled.In FY21,we:Focused on transitioning outerwear and swimwear lines to recycled polyester,including some swimwear previously made from nylon.Transitioned the Polo Pony logo to recycled thread.In FY21,we used more than 432 million meters of recycled thread.Started mapping our polyester use to identify opportunities to reduce and replace it with innovative alternatives.We are also reducing plastic waste through the use of recycled polyester.By 2025,we commit to using at least 170 million recycled plastic bottles in our products and packaging.In FY21,we repurposed more than 21.9 million recycled bottlesincluding 1.8 million through our partnership with First Mile to produce The Earth Polo.2 To date,we have used more than 40 million bottles.In FY21,we continued transitioning to recycled nylon for some of our outerwear lines.Most of our Polo outerwear styles now use recycled materials.In select RLX outerwear,we use Econyla 100 percent recycled nylon made from pre-and post-consumer waste.VISCOSEViscose is a wood-based fiber that,when not sourced responsibly,has been connected to the deforestation of ancient and endangered forests.We are committed to sustainable sourcing of viscose,as described in our Forest Protection Policy.In FY21,viscose made up less than 1 percent of our material use.Of the viscose we used,10 percent has been verified as sourced from manufacturers who have been deemed low-risk according to Canopys annual Hot Button Report.We aim to increase this percentage by improving the visibility of our viscose supply chain.In FY21,we began mapping our viscose fiber manufacturers,and in FY22,we will engage the viscose suppliers who have not signed on to CanopyStyle and encourage them to participate in the third-party audit as we prioritize sourcing from low-risk suppliers,working toward our goal of having 100 percent of our viscose sustainably sourced and verified through CanopyStyle audits by 2025.ANIMAL-DERIVED MATERIALSAround 3 percent of our total material use comes from animal-derived sources,most of which are by-products from other industries.We are committed to the well-being and respectful treatment of animals,as described in our Animal Welfare Policy,which includes our approach to sourcing exotic skins and our long-standing ban on the use of fur.In FY21,we updated our policy with an increased focus on traceability.We recognize that leather,wool and cashmere production have the potential to contribute to negative or positive environmental outcomes.We are determined to source these materials sustainably,with low-stress animal handling and regenerative grazing practices to enhance ecosystem functioning and productivity.We evaluate non-animal alternatives where these materials align with our sustainability principles.We are also members of the Southeast Asian Reptile Conservation Alliance,which advocates for a reptile skin trade that maintains wild reptile populations,supports local and national economies and promotes animal welfare principles.LEATHERIn calendar year 2020,53 percent of our leather manufacturers were certified by the Leather Working Group(LWG),accounting for 89 percent of our total leather use.To support more sustainable leather sourcing,we engage in the Leather Impact Acceleratora program dedicated to aligning members of the leather value chain to achieve meaningful sustainable impacts.We advanced our work on transparency and traceability in FY21 by benchmarking all the tanneries in our supply chain and joining the LWG transparency task force.To support regenerative and holistic land management,we are researching and developing cattle and bison leather options through a direct sourcing model.2 Data is provided by our third-party partners and suppliers.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE13DOWNOne hundred percent of the down sourced for products manufactured by Ralph Lauren suppliers is certified by the Responsible Down Standard(RDS)or the Traceable Down Standard(TDS).We also use Primalofts ThermoPlume down alternativemade from recycled plastic bottlesin select outerwear,such as our custom packable jacket.In FY21,we repurposed 3.6 million plastic bottles using this technology.CASHMERE We finalized our cashmere strategy in FY21 and became a member of the Sustainable Fibre Alliance(SFA).Our strategy will initially focus on sourcing preferred fiber(including SFA certified cashmere)to address animal welfare and land management risks and recycled cashmere to minimize waste and reduce overall environmental impact from virgin production.We will engage in project-based initiatives in cashmere-growing regions to support systemic change and grassland restoration.WOOLIn FY21,we prioritized the use of existing wool fabric and yarn stocks instead of purchasing new.As a result,we had limited progress toward our Responsible Wool Standard(RWS)certified fiber goal.Although our use of RWS certified wool was limited,we took steps to accelerate its future use by incorporating recycled wool into FY22 outerwear garments and starting to source yarns made with RWS certified wool for select core sweater programs.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE14In FY21,we began formalizing our approach to creating more sustainable spaces in our stores.Our goal is to ensure all the key elements in our new store interiorsincluding fixtures,displays,flooring,hangers and signageare sustainably sourced and made from materials that minimize environmental impact and maximize occupant health.We base our approach on guidelines from leading green building and sourcing organizations,including the U.S.Green Building Council(USGBC)and the Forest Stewardship Council(FSC).Our initial focus is on wood substrates(solids,veneers and composites).Consistent with our Forest Protection Policy,we set a 2025 goal for 100 percent of the wood substrates used in key elements of new store interiors to be FSC certified,repurposed or recycled.We have started to track the percentage of key wood suppliers3 for store design and construction that meet this standard.As our work on sustainable spaces progresses,we will assess other key areas for future focus and goal development.Sustainable SpacesWe are committed to designing and building Ralph Lauren stores with materials that minimize environmental impact and maximize occupant health.100 percent of the wood substrates used in key elements of new store interiors will be FSC certified,repurposed or recycled2025 GOAL3Our key suppliers are those with whom we reach a specific annual spend threshold,and this varies by supplier type.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE15Eliminate the use of hazardous chemicals in our supply chain2025 GOALWe monitor and reduce hazardous chemical use and discharge and we are working to eliminate all hazardous chemicals from our product manufacturing.Chemical ManagementWe have a responsibility to ensure the chemicals used to make our products are safe for people and the environment.Our Sustainable Chemical Management Policy guides our approach to assessing the potential impacts of the chemicals used in our supply chain and to partnering with our suppliers on responsible chemical management.The responsible use of chemicals is an industrywide challenge that requires collaboration between companies,their suppliers and third parties.As Friends of the Zero Discharge of Hazardous Chemicals(ZDHC)Programme,we collaborate with peers and experts to eliminate the use and discharge of hazardous chemicals across the apparel supply chain.We adopted the ZDHC Manufacturing Restricted Substances List(MRSL)in FY20 so our suppliers can track and report on all chemicals used to develop and manufacture our products and to prioritize harmful chemicals for removal.In FY21,we shared the MRSL and broader guidance on chemical management with all our suppliers.We also rolled out chemical inventory management tools with our strategic and key wet processing facilities to increase visibility of chemical usage and move toward full MRSL conformance.At the end of FY21,we gained visibility of chemical usage and MRSL conformance status of strategic and key facilities and top mills,representing approximately 31 percent of our supply chain spend.Of the chemicals reported,59 percent conform with the ZDHC MRSL.We are working closely with our suppliers to achieve full conformance by 2025.We also require suppliers with wet processing facilities to test wastewater against ZDHC wastewater guidelines and share results on the ZDHC Gateway portal.Seventy-two percent of the facilities that tested comply with the ZDHC requirement,and out of the substances screened,99.8 percent comply with the ZDHC standard.In FY21,we assessed our suppliers chemical management,along with other environmental impact data,through the Sustainable Apparel Coalition Higg Index Facility Environment Module.In FY22,third-party-verified results of the Facility Environment Module(FEM)assessment,combined with supplier conformance to the ZDHC MRSL and the wastewater standards,will be incorporated into our supplier performance evaluation scorecard and will help inform business decisions.Read more about our work to align our suppliers to Higg in Supplier Engagement.As part of our commitment to phase out all chemicals of concern from our supply chain,we continue to prioritize specific chemicals for elimination.In FY21,we began phasing out the use of per-and polyfluoroalkyl substances(PFASs)-based coating in our water-repellent fabrics,targeting full elimination by FY22.We also aim to phase out polyvinyl chloride(PVC)by the end of FY22,which will contribute to the phase out of phthalates,the plasticizers commonly used to make PVC.WORKING TOWARD MORE SUSTAINABLE DENIMConventional denim production requires significant water consumption and the use of potentially harmful chemicals to grow cotton and to dye and wash finished products.In FY21,we continued transitioning to a more sustainable denim production,including increasing recycled cotton and recycled polyester content in our jeans and working to verify the origin of select cotton used for denim.In FY21,suppliers representing 47 percent of our denim business spend have started to implement new processes,reducing:Water-intensive chemical use in the production of our core denim products.The use of potassium permanganate to wash our denim,with the aim of phasing it out by the end of FY22.The use of pumice stones for our core denim washes by 80 percent,with the goal of fully eliminating pumice stones by 2025.We are also exploring the use of natural indigo dye to replace current synthetic options.In FY21,we partnered with Stoney Creek Farm in Tennessee and our supplier,Cone Mills,to test a natural plant-based indigo dye on a mens Polo style.Natural indigo production enables farmers to diversify crops and support regenerative,sustainable agriculture.This bio-based alternative to synthetic petroleum-based indigo also has the benefit of predictable and consistent coloring.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CREATE TIMELESS STYLE16Protect the EnvironmentThrough ongoing innovation and strong partnerships,we are working across our value chain to reduce our climate and water impacts and avoid waste.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT17Our Climate StrategyToday we face a climate crisis.As part of our commitment to the climate goals set forth in the Paris Agreement,we know ambitious near-term action to decarbonize our operations and value chain should be matched with long-term ambition.In June 2020,we set a 2030 goal to reduce greenhouse gas(GHG)emissions in line with the global reductions needed to limit average temperature rise to 1.5 degrees Celsius.We are now looking beyond 2030 and beyond the reductions we can achieve across our own value chain to achieve net zero GHG emissions by 2040.As part of this strategy,we will begin to scale investment in carbon removals in FY22,with plans to increase those removals through 2040 and maintain net zero GHG emissions thereafter.Our 2030 GHG reduction goal was approved by the Science Based Targets initiative(SBTi)and we have aligned our net zero strategy with the SBTis Foundations for Net-Zero Target Setting.For details on our climate strategy and net zero target,see Ralph Laurens Net Zero Commitment.Carbon&EnergyAchieve net zero greenhouse gas emissions by 20402040 GOALReduce absolute scope 1,2 and 3 GHG emissions by 30 percent by 2030 from a FY20 base year.As part of this goal,Ralph Lauren commits to sourcing 100 percent renewable electricity by 2025.2030 GOALWe are committed to playing our part to address the climate crisis by reducing greenhouse gas emissions across our value chain and investing in credible emission removals.Our Carbon FootprintFY21 GHG FOOTPRINT OVERVIEW:SCOPE 1,2,3*MTCO2E*Percentages may not add up to 100 due to rounding.*Consumer Product Use includes emissions from product washing,drying,dry-cleaning and/or ironing.*Other Value Chain includes upstream energy production,waste generated in operations,and licensed stores.FPO22%6%1%3%6%2%2%Manufacturing&Processing(tier 2)277,019Manufacturing&Processing(tier 1)176,950Raw Materials207,075Transportation&Distribution75,018Consumer Product Use*181,655Product End of Life21,941Business Travel&Employee Commuting18,943Non-Merchandise Spend147,750Other Value Chain*37,680Heating&Cooling14,681Scope 1:Heating&Cooling(1%)Scope 2:Purchased Electricity(6%)Scope 3:Value Chain(92%)Purchased Electricity78,3051,237,017MTCO2eWe are developing an action plan to help us reach these targets,with a focus on:Achieving 100 percent renewable electricity use in our owned and operated facilities.Reducing emissions throughout our supply chain,particularly in the areas of raw material sourcing,manufacturing and garment finishing processes.Tackling the complex issue of climate change and truly driving sustainable change requires partnership.We are signatories to We Are Still In,the Business Ambition for 1.5C Campaign,the UN Fashion Industry Charter for Climate Action,the G7 Fashion Pact and RE100.In FY21,we added our support to the America is All In policy statement,joining thousands of U.S.communities,businesses and institutions calling for,and committing to,a clean recovery in the wake of COVID-19.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT18Carbon Footprint(Scope 1,2 and 3)(MTCO2e)1 FY202FY21Total Emissions1,861,7361,237,017Scope 1 Emissions16,24814,681Scope 2 Emissions90,38078,305Scope 3 Emissions1,755,1071,144,031Carbon Intensity(MTCO2e/$million revenue)302.24281.091We measure and calculate our emissions according to the World Resources Institute Greenhouse Gas Protocol,the industry standard and international tool for carbon accounting.For a more detailed methodology,see our ESG Supplement.2 Our FY20 carbon footprint has been updated since the original release of our FY20 Global Citizenship&Sustainability Report to reflect improved data methodology,including corrected electricity consumption at one of our distribution centers,more accurate estimates of manufacturing emissions and a more complete estimation of fabric mill emissions.Since improving our calculation methodology last year,we began tracking progress toward our 2030 goal by measuring the carbon footprint of our entire value chain.Our Scope 3 emissions accounted for 92 percent of our total footprint in FY21,with Scope 1 and 2 accounting for the remainder.Our Scope 1 and 2 carbon footprints consist mainly of emissions from electricity and fuels for heating and cooling the facilities in our direct operations,plus a smaller portion from refrigerant emissions.In FY21,our operational energy consumption decreased to 260,247 MWh,which resulted in 92,986 MTCO2e.The energy intensity of our owned and operated stores was 32.1 kWh/sq ft.Our Scope 3 carbon footprint consists of indirect emissions from our global supply chain.In FY21,our total Scope 3 emissions decreased to 1,144,031 MTCO2e.The evolving situation surrounding COVID-19 and ongoing high level of uncertainty has led to business disruptions that are reflected in our overall carbon footprint.Overall,our absolute emissions decreased by 34 percent in FY21.These changes are driven by production volumes decreasing by over 30 percent compared to FY20,which contributes significantly to our Scope 3 emissions from manufacturing and raw materials.We remain committed to implementing our GHG action plan for achieving and maintaining a 30 percent reduction in our carbon footprint by 2030.More detail on our carbon footprint is available in our ESG Supplement.RENEWABLE ENERGYMoving to 100 percent renewable electricity for our owned and operated facilities is essential to meeting our Scope 1 and 2 emissions reduction goal.In FY21,6 percent of electricity used in our operations was from renewable sources,such as wind power,compared with 2 percent in FY20.This improvement resulted from increased renewable energy attribute certificate purchases in North America and Europe.To drive more rapid progress toward our 2030 goal,we adjusted our renewables strategy in FY21 to focus on virtual power purchase agreements(VPPA)in North America,while also seeking opportunities to support community solar projects close to the communities where we operate.For any remaining renewable electricity needs,we will source renewable energy credits(RECs)and equivalent certificates in Europe and Asia.We expect to sign our first VPPA in FY22.We are members of RE100a global group of influential businesses committed to achieving 100 percent renewable energyand we align our renewable sourcing with RE100s new market boundary criteria.In FY21,we joined the Renewable Energy Buyers Alliance and signed the Energy Buyer Federal Clean Energy Policy statement,which calls upon the federal government to transition to zero-carbon energy.ENERGY EFFICIENCYWe continue to improve the energy efficiency of our stores and offices.We are focused on reducing energy-intensive components like lighting,heating and cooling through energy management systems and by installing more efficient technology.In FY21,we retrofitted 76 stores in North America,Europe and Asia to use energy-efficient LED lighting and installed LED lighting in an additional 61 new stores.By the end of FY22,all of our retail stores in Europe will be equipped with efficient lighting.In FY21,our stores consumed 173,220 MWh of energy and their carbon intensity was 0.012 MTCO2e/sq fta 16 percent decrease compared with FY20.In FY22,we will begin to deploy new energy management systems at retail stores in North America.This will allow us to more accurately track energy use and adjust our lighting,heating and cooling for greater efficiency.Carbon&Energy:Our OperationsOur owned and operated offices,distribution centers and stores will be powered by 100 percent renewable electricity 2025 GOALGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT19Activities in our supply chain are the greatest contributors to our carbon footprint.We are working across materials sourcing,manufacturing and distribution to reduce our GHG emissions.Our next step is to integrate strategic road maps for these key focus areas into an overall strategy for reducing our supply chain carbon footprint.Carbon&Energy:Our Supply ChainTRANSPORTATION&DISTRIBUTIONOur Scope 3 footprint includes emissions from product transport,such as train,ship and air freight.To mitigate cost and environmental impact,we prioritize efficiency when choosing how to transport products to our distribution centers.We only allow vendors to deliver products by air in rare circumstances,such as when production does not meet delivery deadlines and there is a risk to keeping our promise to our customers.We are signatories to the Ocean Conservancy Arctic Shipping Pledge,which commits us not to hire carriers to ship our products through Arctic Trans-Shipment Routes.And we engage with Clean Cargo,a BSR collaboration for sustainable transportation,and the U.S.Environmental Protection Agency SmartWay program on efficient logistics.In FY21,air freight managed directly by Ralph Lauren was 6.7 percent compared with 3.8 percent in FY20.This increase was due to a combination of factors,including efforts not to buy ahead and create excess stock and time constraints linked to factory closures or delays as a result of COVID-19.In FY21,vendor-managed air accounted for 2.4 percent of total shipments,compared with 3.8 percent in FY20.From FY22,our logistics provider selection process will include a sustainability scorecard that measures candidates sustainability practicesfrom the presence of a company sustainability strategy to performance measurement and continuous improvement plans.RAW MATERIALSOur strategy for reducing emissions from our raw materials focuses on switching to preferred fibers that result in fewer emissions than those that are conventionally grown.We are evaluating our fiber portfolio and creating annual preferred fiber usage goals.We aim to increase our use of recycled materials and fibers grown using regenerative land management practices,which will have multiple benefits for carbon sequestration,biodiversity and ecosystem functioning.Read more in Sustainable Materials.MANUFACTURING&PROCESSINGIn FY21,we gathered environmental impact data,including energy and emissions,from our strategic and key suppliers through the Sustainable Apparel Coalitions Higg Index Facility Environment Module.Results from this assessment are shared in Supplier Engagement.In FY21,five of the largest fabric mills in our supply chain continued their journey through the Apparel Impact Institute(AII)Mill/Impact program,which focuses on achieving sustainable reductions to mill carbon,water and chemical footprints.All five mills completed on-site expert visits to identify efficiency improvement opportunities,which they will begin implementing to realize carbon reductions.Our next step is to expand engagement with our suppliers through collective actions and strategic programs that drive emissions reductions in manufacturing facilities,aligned with our science-based target.In FY21,we also made progress reducing transportation emissions for raw materials and manufacturing by developing local-to-local supply chains.We are working to consolidate our supply chain,with a goal for 80 percent of our business to be with strategic and key suppliers by 2025.Air Freight1 FY19FY20FY21Air Freight(%of shipments)5.8%3.8%6.7%1Inbound shipment from factory to global point-of-receipt managed directly by Ralph Lauren.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT20Our Water Stewardship StrategyCONSERVATIONIn FY21,we continued to collaborate with the World Wildlife Fund(WWF)to advance our work in this area and set a comprehensive strategy for water stewardship and water use reductions in our value chain.We analyzed our value chain through the WWF Water Risk Filter to map key areas of water risk and develop a water footprint.The analysis also identified opportunities for watershed conservation,reduced water consumption and improved community access to water.Our goal to reduce water use by at least 20 percent by 2025 relates to manufacturing and processing in our supply chain and water use in our owned and operated facilities,compared to a FY20 baseline of 14,870,315 m3.In FY21,our footprint was 9,661,765 m3a 34 percent reduction compared to FY20.This decrease was primarily driven by COVID-19-related business impacts,such as production volumes decreasing by over 30 percent compared to FY20,which contributes significantly to our supply chain water consumption.More details on our water footprint is available in our ESG Supplement.In our manufacturing supply chain,we focus on improving water use efficiency while also considering the shared basin-level water needs where our suppliers fabric mills,factories and laundries are located.We are setting contextual water targets to better align our reduction goal with surrounding water challenges.In priority water-stressed locations,we are contributing to collective action projects with WWF and local partnerships and experts to scale water use assessments and reduction strategies.Freshwater is an essential resource for people and wildlife,and a foundation for healthy ecosystems and thriving economies.Its also a resource that the apparel industry is heavily reliant onfrom growing cotton to dyeing and washing fabric.Our approach to water stewardship includes actions that address overall use and quality,as well as protecting watersheds and ensuring access.Water StewardshipAchieve at least a 20 percent reduction in total water use across our operations and value chain,compared to a FY20 baseline2025 GOALWe commit to reducing water consumption across our value chain and to safeguarding and preserving water resources in our communities.COTTONCOMMUNITYCONSERVATIONSustainably source cotton and accelerate the adoption of regenerative farming practices.Partner with organizations focused on watershed health and community WASH(Water,Sanitation and Hygiene)solutions.Safeguard and preserve water resources where we operate through contextual water targets and collective action program implementation in priority geographies with high water stress.We take a holistic approach to water stewardship covering our value chain and beyond.Owned&Operated Facilities:296,669 m3Manufacturing&Processing:14,573,646 m3 Total:14,870,315 m3OUR FY20 WATER FOOTPRINTGLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT21WATER STEWARDSHIP IN OUR SUPPLY CHAINWe are working with our product manufacturers to use more water-efficient production methods and to capture water data through the Sustainable Apparel Coalition Higg Index Facility Environment Module.The five tier 2 fabric mills we enrolled in the Apparel Impact Institute Mill/Impact program are progressing through an 18-month process to reduce their overall environmental impact,including water use.The most recent focus is on efficiency measures,including optimizing the recovery of steam condensate and cooling water,maximizing the reuse of manufacturing process water and advancing wastewater treatment systems.Preliminary results show 8 to 20 percent reductions in water use,with the investment payback period ranging from 5 to 26 months.Other water stewardship initiatives in FY21 include:Continuing our partnership with knit and woven manufacturers to minimize water use and improve effluent treatment by upgrading factory processing and equipment.Continuing to reduce the use of water-intensive chemicals and processing in the production of our core denim products.Launching Color on Demand,a revolutionary dyeing platform to color cotton more sustainably,using less water,less dye and less energy(see case study right).REVOLUTIONIZING COTTON DYEINGEach year,trillions of liters of water are used for fabric dyeing alone,generating around 20 percent of wastewater worldwide.This water often requires lengthy,costly treatment to make it reusable.We brought together four leading innovators in their respective fieldsDow,Jeanologia,Huntsman Textile Effects and COROBto reimagine each stage of the coloring process and join a shared mission to create a more sustainable and efficient system for cotton dyeing.The result is Color on Demand.This new multi-phased platform is composed of a set of innovative technologies that will enable the recycling and reuse of all water from the dyeing process,establishing the worlds first scalable zero-wastewater cotton dyeing system.In addition to significant water savings,Color on Demand dramatically reduces the amount of chemicals,dye,time and energy used in the cotton dyeing process.As part of the first phase of Color on Demand,we optimized the use of ECOFASTTM Purea pre-treatment solution for cotton garments,developed by Dow.When used with existing dyeing equipment,ECOFAST Pure enables the use of up to 40 percent less water,85 percent fewer chemicals,90 percent less energy and a 60 percent reduction in carbon footprint compared to traditional cotton dyeing processes.In partnership with Dow,we are releasing a detailed manual about ECOFAST Pure to encourage industry adoption and help standardize more sustainable cotton dyeing.By 2025,we aim to use the Color on Demand platform in more than 80 percent of our solid cotton products.This revolutionary system will transform how the fashion industry colors cottonmore sustainably,more effectively and faster than ever.To learn more about Color on Demand,watch here.COTTON As part of our water stewardship strategy,we evaluated the impacts of cotton farming.We looked at our key cotton growing regions through the WWF Water Risk Filter to identify geographies with high risk for water scarcity.We also estimated total water use(rainfed and irrigated)in cotton agriculturethe volume used is significant and our focus is on both reducing water use in cotton production and increasing effectiveness of water use.A key driver of this is the adoption of regenerative farming practices that make better use of rainfall and irrigated land.These practices increase soil fertility,water holding capacity and carbon capture;reduce erosion and pollution runoff;and create more resilience against floods and droughts.Read more about our work to increase the adoption of more sustainable cotton.COMMUNITYEssential to our overall water stewardship strategy is supporting watershed health through conservation interventionsincluding wetland restoration,stakeholder engagement and the adoption of preferable land use management practices.We will invest in a number of water conservation programs in the coming year,as well as furthering our partnerships with organizations focused on community access and WASH(Water,Sanitation and Hygiene)solutions,based on local needs.More details on our water footprint is available in our ESG Supplement.In FY22,we will submit our first CDP Water response,with plans to increase our disclosures in this area in the future.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT22Waste in our Operations Across our distribution centers,offices and stores,we work to minimize waste and avoid sending materials to incineration or landfill,including excess inventory.In FY21,we reduced our overall operational waste compared with FY20,due in part to COVID-19-related business impacts.We generated approximately 4,600 metric tons of waste at our distribution centers and diverted 85 percent of this from landfillon track to meet our 2023 goal.In our North America-owned distribution centers,we achieved a 90 percent diversion rate in FY21.We also collected detailed waste data for all three of our third-party-operated distribution centers in Asia.As we work to become a more circular business,we are integrating zero-waste principles across our operations and supply chain.We aim to reduce excess inventory,keep materials in use for as long as possible and minimize waste generated at our facilities.Waste ManagementAchieve zero waste to landfill across our distribution centers12023 GOALWe commit to integrating zero-waste principles across our business,focusing on reducing waste at its source and diverting waste from landfill through increased recycling and upcycling.Waste Generated at our FacilitiesMetric TonsDiversion RateFY20FY21FY20FY21Distribution Centers 5,5074,62285%Stores*2,9171,77778%Offices*1,434128355%Total9,8586,52775%*Comprehensive site-specific waste data was not available for all offices and stores.Waste data was modeled for these sites.DISTRIBUTION CENTERSAt our distribution centers,we focus on finding recycling solutions for the waste materials we generate.In FY21,we worked with local recycling vendors to divert over 18,000 pounds of hangers from landfill at our North Carolina distribution center.We also began using recyclable corn board pallets for our internal distribution center activities and aim to expand this in FY22.We diverted all creative props and other decorative assets from landfill through recycling,sales to staff and donation of over 400 items to Habitat for Humanity,universities and other charities.OFFICES,SUPPLIERS AND STORES We initiated several new practices in FY21 to reduce and recycle waste from samples and fabric scrap in our offices and with suppliers.We are reducing the number of samples being created and shipped by working with suppliers to test their materials in-house rather than sending samples to third parties.We are also increasing the use of digitization so suppliers can create new products virtually and reducing sampling components,color approvals and related transportation.We also started a partnership with FABSCRAP to recycle fabric trim and samples in our offices.In FY21,we recycled and reused over 20,000 pounds of fabric waste.To further our teams knowledge of fabric waste,in FY21 our employee sustainability group,the Green Ponies,hosted a discussion with the CEO of FABSCRAP during our Earth Day Speaker Series event.The Green Ponies also continued to play an active role in other office waste reduction efforts.In FY21,they developed and distributed office and home recycling guides for our New York employees.They also improved the recycling signage in preparation for employees return to our New York and North Carolina offices.1Using the Zero Waste International Alliance definition of zero waste,we will divert more than 90 percent of the waste generated at our distribution centers from landfill and incineration.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT23Managing Excess InventoryAn estimated 92 million metric tons of textile waste is created globally each year.2 This is a systemic problem in the fashion industry and one we are determined to help eliminate.Our Excess Inventory Management Principles standardize the steps we take to prevent our products from becoming waste.The principles are supported by a waste-management hierarchy to guide our decision-making for inventory and commercial waste.Prevent Excess at SourcePursue Expanded Sales ChannelsMaximize Product orMaterials Next LifeDonate for Positive ImpactRecycleDisposeMost preferredLeast preferredOUR EXCESS INVENTORYMANAGEMENT PRINCIPLESPREVENTING EXCESS AT SOURCEOur first step to reducing inventory waste is to prevent the production of excess product.Minimizing overproduction is a challenge across our industry.A key part of the solution is predicting product demand so we produce only what is needed.We are working toward this by shortening product lead times and implementing agile production models.We are also applying intelligent buying techniques that more closely predict demand and match it with manufacturing.We completed a pilot project to minimize overproduction of wholesale orders in our European market.The pilot used a“cut-to-sales”model to ensure wholesale orders occur only after confirmation of customer orders.We will continue to refine our sales models and investigate options for improved real-time tracking systems in the European market to further avoid excess production.PURSUE EXPANDED SALES CHANNELS Once we have offered our products at full price across our range of channels and regions,we consider alternative sales channels for products not sold within planned timeframesincluding via our outlet stores and various clearance partners around the world.Moving units between markets can also be an effective way of opening up new sales options for existing products.In FY21,we transferred 800,000 units globally to put them through clearance channels.We are seeing greater interest from our customers in service-based models such as rental platforms or“shared closets.”In FY21,we announced the introduction of The Lauren Look,our first subscription apparel rental initiative,with the Lauren Ralph Lauren brand.In addition to supporting the reduction of clothing waste by expanding the lifespan of garments that might otherwise be purchased and worn only a few times,the collections will be donated to Delivering Good once they reach their rental cap.In addition to our branded rental site,our Polo,Lauren and Club Monaco brands are available for rent on multi-branded marketplaces,including Rent the Runway,Gwynnie Bee and Nuuly.MAXIMIZE PRODUCT OR MATERIALS NEXT LIFE Through capsule-driven collections on the Polo app,in-store events and consumer research,we have gained valuable insight into how to give our products additional lives through rental,re-commerce and upcycling.We are building on the momentum of our current initiatives to make a greater impact,focusing on evaluating potential new partners to scale our offering.In addition to our subscription apparel rental initiative,we see opportunity for a large-scale re-commerce program inclusive of restored,reimagined or upcycled products to further extend garment lifespans.EMPLOYEE ACCESSWe give our employees access to excess inventories through stock sales.To reduce geographic restrictions to specific stock,we piloted a digital employee sale in North America in FY21.DONATE FOR POSITIVE IMPACTOur product donation strategy aims to help communities around the world,especially where our employees and customers live and work.In FY21,we donated more than 1.5 million units of products to support hundreds of thousands of frontline workers and families in need around the world.The donation included comfortable loungewear and daily items,such as sweatshirts,sweatpants and T-shirts.These products have been distributed through charity networks,as well as many of our long-standing Pink Pony partners focused on cancer care.RECYCLE Recycling products at scale presents technical challenges,particularly for apparel with blended fabrics and non-textile products like footwear and handbags.We are finding more opportunities to recycle excess product by exploring new partnerships and innovations.In FY21,we established partnerships with recyclers in Europe that will continue in FY22.We also initiated upcycling pilot projects in North America and Asia to explore technologies for converting damaged and excess products into new textile fabric and yarns.DISPOSALOnce all other options have been exhausted,our last resort is product disposal or destruction.We try to avoid this wherever we can,and then prioritize waste-to-energy disposal methods where available.We continue to ramp up our donation and recycling partnerships to avoid the need for disposal.Ultimately,we aim to cease this option altogether.2Reversing Climate Change is Fashions Next Big Thing,Global Fashion Agenda,January 17,2020.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT24Environmentally responsible packaging is an essential part of a circular future.By 2025,all our packaging material will be recyclable,reusable or sustainably sourced,which includes packaging made from post-consumer or post-industrial recycled content,or that is Forest Stewardship Council(FSC)certified.In FY21,54 percent of our packaging volume and 71 percent of our stock-keeping units(SKUs)met at least one of our sustainable packaging criteria.5 In FY22,we will be implementing a regular,standardized reporting process for our suppliers to allow us to track sustainable aspects of our packaging across brands,packaging types and regions throughout the year.Our Forest Protection Policy supports our 2025 goal,describing our commitment to responsibly source any fabric,pulp and paper used in packaging.We collaborate with Canopys Pack4Good initiative,in which innovative companies and suppliers help develop closed-loop solutions for packaging and paper that reduce negative environmental and social impacts.As part of this initiative,over the next three years we will:Source or design reusable or refillable shipping boxes to reduce corrugated paper use.Design and implement e-commerce,shipping,display and wrapping systems that minimize the use of paper.Employ reusable packaging systems.For example,in FY21,we tested reusable packaging from RePack with around 2,000 e-commerce orders in the U.S.We are evaluating options for expanding our use of this packaging in the U.S.and potentially other regions.Sustainable Packaging100 percent of our packaging material will be recyclable,3 reusable or sustainably sourced42025 GOALIn FY21,we updated our product packaging inventory,which tracks every material used and identifies priority materials for reduction or replacement.Our 10 highest-priority materials include high-volume usage items,such as decorative tags and polybags.We currently use FSC certified paper for our hangtags for core items.In FY21,we began eliminating nonessential decorative tags,which will continue into FY22.We plan to transition to 100 percent post-consumer recycled content in our plastic polybags in FY22.This is an interim milestone as we work to reduce the need for polybags and to identify alternative materials for our polybags that fully meet our definition of recyclable and sustainably sourced packaging.3,4 We are engaging with partners and innovators through the Fashion Pacts Oceans pillar to identify and test paper-based polybag alternatives that will meet our performance requirements while also being recyclable at scale.Through RalphL,our reduced packaging option gives customers the ability to have plastic or paper inserts,hangers,garment bags,promotional materials and paper invoices removed from their orders.In FY21,we removed and recycled all of the polybags from reduced packaging orders,which represented 15 percent of all orders placed through RalphL(12 percent in FY20).3We use the Ellen MacArthur Foundations New Plastics Economy Global Commitment definition of recyclable:a packaging or packaging component is recyclable if its successful post-consumer collection,sorting and recycling is proven to work in practice and at scale.4Sustainably sourced includes packaging that is post-consumer or post-industrial recycled content or FSC certified.5These percentages represent packaging from the subset of our suppliers who reported data for FY21.We are working to collect data from a more complete share of suppliers in FY22 and beyond.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|PROTECT THE ENVIRONMENT25Champion Better Lives We aim to create a more equitable world and positively impact the lives of people in our workforce,communities and supply chain.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES26Our Strategic ApproachRalph Laurens Global Diversity&Inclusion(D&I)strategy supports our purpose:To inspire the dream of a better life through authenticity and timeless style.We strive to fulfill our purpose and D&I commitment through actions that make an impact across our Company,among our customers and partners and within greater society.Our D&I strategy spans five pillars:Talent Cultivate diverse teams and elevate underrepresented talent to leadership ranks Collaboration and Belonging Enable open dialogue and create safe spaces for the amplification of diverse voices and perspectives Learning Build an inclusive culture through awareness,education and advocating for access to education for all Communication and Messaging Maximize our inclusive message Celebration and Recognition Appreciate our unique differences and increase educational events for all employees,with a focus on diverse experiencesOur D&I efforts focus on strengthening diversity and inclusion across race,ethnicity,gender,gender identity,sexual orientation,disabilities,mental health and wellness.Diversity&Inclusion We unite and inspire the communities within our Company as well as those we serve by amplifying voices and perspectives to create a culture of belonging,equality,inclusion and fairness for all.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES27We are always looking to listen,learn and deepen our work to create environments that reflect the values that define our brandvalues like authenticity,dignity and respect for one another.And we want everyone to experience these values consistently.We are deeply examining biasincluding looking critically at the structures and practices inside our Company,how we use our voice as a leader in our industry and the role we play in portraying the American dream.COMPANY ELEVATE TALENT INTO LEADERSHIP RANKSFor every open role at the Vice President level or above,we will interview at least one Black candidate and at least one candidate from other underrepresented groups.We also committed to ensuring that our Global Leadership Team is at least 10 percent Black,African or African American and at least 20 percent people of color by 2023.COMPENSATION AND BENEFITS EQUITYOur retail and distribution and fulfillment center populations are the most racially and ethnically diverse areas of our Company.In FY21,we rolled out expanded medical benefits for our U.S.part-time employee population.Looking ahead,we will regularly review all internal policies to ensure equity for our Black,African and African American employees and employees of color.AMPLIFY DIVERSE VOICES AND PERSPECTIVESWe expanded both our D&I Employee Advisory Groups and RL Communities,including establishing the Asian,Asian American and Pacific Islander(API)Advisory Council;the Black Advisory Council(BAC);the Hispanic,Latino and Latinx Advisory Council;the Native American Advisory Council in North America;and the Black,Asian,Minority Ethnic(BAME)group in EMEA.Each group plays a central role in helping to ensure that our Companys progress is rooted in the real experiences of our diverse employees.We also established monthly employee roundtables to encourage education and empathy,further build community and empower our teams to mobilize action for meaningful impact.In addition,to understand the unique needs and priorities of our employees,we increased the focus on diversity,equity and inclusion in our employee surveys.STRENGTHEN STRUCTURED EDUCATION PRACTICESWe have built on the formal unconscious bias and microaggression training we started in 2018.Part two of our mandatory D&I trainingRespect and Inclusion:Allyship and Advocacywas completed by all managers in July 2020 and our entire employee population in December 2020.Going forward,completion of this training is required for all new hires.COMMUNITY EXAMINE HOW WE PORTRAY THE AMERICAN DREAM AND USE OUR BRAND VOICEWith our Advisory Councils and Employee Groups,we are closely reexamining our brands role in portraying the American dreamfrom the products we create to the imagery we promote.Were diversifying our brand storytelling,committing to represent Black talent in at least 20 percent of our brand marketing and advertising on owned digital channels each year.FORGING NEW CREATIVE PARTNERSHIPSWe will be investing in Black,African and African American creative partnersincluding the content creators in front of and behind the camera and Black-owned media platforms.HOLD OUR NETWORK ACCOUNTABLEIn July 2020,we reviewed our media partners to ensure the platforms we conduct business through operate in a way that aligns to our values and D&I standards.We also developed a set of diversity expectations for all partners.CONNECT WITH CONSUMERSWe are conducting detailed analyses of our Black,African and African American consumer composition and their perceptions and expectations of our brand to inform our cross-functional business strategies.SOCIETY ADVANCE SOCIAL JUSTICEWe designated four CEO Action for Racial Equity fellowsdelegates from our Company who are temporarily stepping away from their roles to create large-scale impact for racial equity and justice by advancing public policy reform at the U.S.local,state and federal levels.In the areas around our largest American facilitiesNew Jersey,New York and North Carolinawe started opening dialogues with public works bureaus,nonprofits,district attorney offices,school districts,and police and sheriff departments.Those conversations turned into opportunities for sharing our diversity,equity,inclusion and anti-racism trainings and resources.Additionally,through our involvement in the Open To All campaign,we are open-sourcing our D&I training materials to public safety agencies,schools and businesses.DEEPEN OUR PARTNERSHIPS AND INVEST IN EDUCATIONWe have deepened our relationships with existing partners like The Access Project,Phi Beta Sigma and United Negro College Fund.Additionally,we donated more than$100,000 in scholarships to support students of color and we are developing mentorship and talent pipelines with HBCUs and historically Black sororities and fraternities.We are also exploring ways to increase our support for Asian,Asian American and Pacific Islander communities,including but not limited to our existing relationship with Asian Americans for Equality,Asian&Pacific Islander American Scholars as well as the Asian University for Women in Bangladesh.We recognize that our work is far from being complete,and we approach all of this with intentionality and humility.We are on a journey and do not claim to have the perfect playbook or all of the right answers.But we will continue to accelerate our pace of progress,and we will take action today,tomorrow and into a better future.Our ongoing commitment to racial equity,including our standing pledgeto be Open to All,can be found in our June 2020 and May 2021 openletters from Ralph Lauren and Patrice Louvet.Taking Action on Racial Equity GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES28ENSURING DIVERSE REPRESENTATIONThe diversity of Ralph Lauren employees and our culture of inclusivity drive innovation and creativity.We design our talent management programs to attract,retain and promote people from all backgrounds.We are committed to being transparent in our D&I journey.As part of this commitment,in FY21,we expanded our D&I data disclosures to include gender and ethnicity breakdowns by corporate and non-corporate roles and the diversity of our Board of Directors.In FY21,64 percent of our global workforce was female and 60 percent of our U.S.workforce was from underrepresented race and ethnic groups,consistent with representation from FY20.As a founding member of Parity.org,we support its mission to close the gender and racial gap at the highest levels of business,where those disparities are widest.Over the past three years,we have also worked closely with Parity.org to create our own road map by adopting the Parity Model.Based on representation,equality and inclusion,this model will continue to drive gender parity and greater diversity within our Company and industry.In FY21,we continued to meet our goal for gender parity in VP level and above positions.Moving forward,we will expand our focus beyond parity to include factors that retain women in leadership,including flexibility in work,policies,pay equity,culture and development.We set a new goal in FY21 to have at least 20 percent of our Global Leadership Team be from underrepresented race and ethnic groups by 2023.We phased our path to this goal,and in FY21,we achieved our interim target of 13 percent.To make progress toward this goal,we have:Participated in McKinsey&Companys Black Executive Leadership Program,which is designed for Black senior executives looking to ascend to C-suite roles.Joined McKinsey&Companys Management Accelerator Program,which provides self-identified Black colleagues an on-demand digital curriculum focused on building core management and leadership capabilities,as well as cross-functional knowledge.Have at least 20 percent of our Global Leadership Team be from underrepresented race and ethnic groupsAchieve gender parity with equal representation in leadership positions at the VP level and aboveONGOING GOALACHIEVED FOR FY212023 GOALWe also promote gender equality beyond our walls.Within our supply chain,our goal is to achieve 25 percent higher female representation in factory management by 2025.Learn more in Worker Empowerment and Well-Being.RECRUITING DIVERSE TALENTTo sustain a robust and diverse talent pipeline,our University Relations program recruits at broadly representative colleges and career fairs.We have committed to interviewing at least two underrepresented prospects for each eligible position we have available.In FY21,58 percent of our global new hires were female,a decrease of 1 percent compared with FY20.Sixty-four percent of U.S.new hires identified with one or more underrepresented racial or ethnic groups,a year-over-year decrease of 4 percent compared to FY20.We work with nonprofits to expand career opportunities for people from marginalized or underserved communities.In FY21,we continued our partnership with SEO Scholars to mentor public high school and college students for a career in the fashion industry.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES29WORKFORCE DIVERSITY DATA1New Hire Diversity FY19FY20FY21%of global new hires that are female 57YX%of U.S.new hires from underrepresented race and ethnic groups67hd%U.S.New Hires,by Race and Ethnicity(%of total)FY19FY20FY21U.S.new hires,by race and ethnicity(%of total)10000%White 31)4%Asian7%6%4%Black or African American27)1%Hispanic or Latino26!%American Indian or Alaskan Native1%0.4%1%Native Hawaiian or Pacific Islander0.5%0.4%0.5%Two or more races5%5%5%Undeclared4%3%4%U.S.Employees,by Race and Ethnicity(%of total)FY19FY20FY21U.S.employees,by race and ethnicity(%of total)10000%White 3978%Asian8%8%8%Black or African American23$%Hispanic or Latino23$#%American Indian or Alaskan Native0.5%0.5%0.4%Native Hawaiian or Pacific Islander0.5%0.5%0.4%Two or more races3%4%3%Undeclared3%3%3%Global Female Representation FY19FY20FY21%of total global employees that are female 64dd%of non-corporate employees that are female(retail,store-line)63cd%of corporate employees that are female67ff%of corporate management(leadership,VP )that is female*49IH%of corporate executive leadership(our Global Leadership Team and above)that is female*42EB%U.S.Representation of Underrepresented Race and Ethnic Groups*FY19FY20FY21%of total U.S.employees from underrepresented groups 58%of non-corporate employees from underrepresented groups67pg%of corporate employees from underrepresented groups45FH%of corporate management (VP )from underrepresented groups 14 %of corporate executive leadership(our Global Leadership Team and above)from underrepresented groups*7%*Due to total number of VP and above positions,parity is considered to be reached between 40-60%.*Our Global Leadership Team includes direct reports to CEO and Executive Leadership Team.*Underrepresented used in the U.S describes any employee who is not considered white.*Our Global Leadership Team includes direct reports to CEO and Executive Leadership Team.Board of Directors Diversity FY19FY20FY21%of the Board that is female29%1%of the Board from underrepresented groups 7%8%1Some table percentages may not add up to 100 due to rounding.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES30FOSTERING AN INCLUSIVE CULTUREOur Company is home to people from many different backgrounds and we value the varied perspectives they bring.We are creating a culture in which all employees feel welcome and can thrive through the celebration of identities,training and by encouraging participation in employee resource groups.In FY21,we created a new course for all employees,“Respect and Inclusion:Allyship and Advocacy.”The course is also part of our onboarding for all new employees.PAY EQUITYWe take a proactive approach to gender and ethnic pay equity and continually monitor our compensation programs to ensure fairness.As of FY20,our female employees in the U.S.earned an average of 99 cents for every$1 earned by males.In line with Parity.orgs best practices,we conduct a biennial assessment with an independent human capital management firm to analyze employee compensation based on gender and ethnicity in the U.S.In FY20,we found that 96 percent of our U.S.employees salaries fell within the equal pay parameters set by our model.We moved immediately to correct instances where compensation fell outside the parameters.2 In FY22,we will expand our human capital assessment to examine gender pay equity for our global operations.In 2020,we published a U.K.Gender Pay Gap report in line with U.K.legislation.Our mean and median gender gaps in pay and bonuses were substantially narrower than U.K.average figures.Due to COVID-19,the U.K.government did not require companies to publish a report for FY21.Our previous reports are available here,and we will continue to comply with future reporting requirements.In FY21,our workplace culture earned recognition in:Forbes Americas Best Employers for Women Forbes Worlds Best Employers Great Place to Works Certified Companies(U.S.)Parity.orgs Best Companies for Women to Advance The Human Rights Campaigns Best Place to Work for LGBTQ EqualityEMPLOYEE RESOURCE GROUPS(ERGs)In FY21,we restructured our ERG model to promote global participation and inclusion.The ERGs are grouped in three categories:D&I Teams:Formed by location in each country and empower employees to foster D&I in their local workplaces.Ralph Lauren Communities:Focused on a shared area of identity and passion and partner with our D&I Teams on advocacy across the Company.Communities include Gender Parity;#RL Pride;Disability,Mental Health&Wellness;and Working Parents.Advisory Groups:Race and ethnicity D&I groups advise our Executive Leadership Team and organization to help amplify the voices of diverse groups at Ralph Lauren.These groups include:Black Advisory Council,Asian Pacific Islander Council,Native American Council as well as our Hispanic,Latino and Latinx Council.2We expect that a small percentage of employees will be paid outside the predicted range to appropriately compensate for special skills or advanced degrees,which are not taken into account in the model.In those instances,we do not adjust compensation.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES31INVESTING IN ALL EMPLOYEES EMPLOYEE WELL-BEING We attend to the physical,emotional,social and financial needs of our employees and their families.THRIVE,our global wellness program,provides access to benefits such as flexible work arrangements,sabbaticals,volunteer events and physical and mental wellness support.In response to COVID-19,we expanded services in the U.S.to include additional backup childcare as well as MyStrength,an online wellness portal.Globally,we hosted monthly wellness webinars and provided weekly meditation through our RL Well-Being Exchange program.LEARNING AND DEVELOPMENTAll employees can build skills and prepare for the future through the Ralph Lauren Learning Portal.In FY21,91 percent of employees used this platform.We added new courses this year,many of which focus on remote working skills as well as D&I.The learning portal is just one option for corporate employees to apply their benefit of 10 hours of company-sponsored learning time.We also support learning beyond our walls through tuition assistance.In FY21,Ralph Lauren awarded scholarships to employees enrolled in courses that build their professional skills.ACTING ON FEEDBACKWe gather direct feedback from employees,measure their engagement and,through our employee survey,understand how we can improve.Amid the events that occurred over the past year,including a transition to remote working,in FY21,we implemented three pulse surveys conducted by an independent third party in place of our normal annual survey.Through the surveys,employees indicated that our top strengths include a feeling of connection with our Ralph Lauren values,managers flexibility and support when addressing personal matters and continued pride for the Ralph Lauren brand.The survey also highlighted areas of improvement,such as decision-making responsibilities for employees in lower-level positions within the organization.For FY22,we will return to our global annual employee survey.FAIR TREATMENT FOR ALLOur Fair Treatment Policy helps us maintain a professional and productive work environment that is also free from discrimination and harassment.In FY21,we updated the policy to include our stance against bullying.People can raise concerns about the work environment through our open communication policy and they can escalate concerns in several ways,including through our open-door policy and the RL Global Hotline.Our Global People Practices Team ensures the Fair Treatment Policy is implemented through legal compliance,working practices and reviews of impartial issues.Employees must also adhere to our Code of Business Conduct and Ethics as well as our anti-bribery and anti-corruption policies.We provide annual training on these policies to help employees make appropriate decisions in their day-to-day work.RESPECTING HUMAN RIGHTS ACROSS OUR VALUE CHAIN The threat to livelihoods and health posed by COVID-19 reinforces the importance of our commitment to respect the human rights of everyone touched by our business.We embody this commitment in our Human Rights Policy,which expresses our decades-long support for the human rights of our employees,as well as our suppliers,customers and business partners.Our policy was developed with reference to the UN Guiding Principles on Business and Human Rights and the Organisation for Economic Cooperation and Development Guidelines for Multinational Enterprises.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES32OUR PEOPLEAt the start of the pandemic,our first priority was to safeguard the health and well-being of our people.When the majority of our workforce began working remotely,we provided online resources to help with this transition,including a focus on physical and mental health.For roles that required employees to be in-person,we established safety measures within our offices and stores.Financial grants were also provided through the Ralph Lauren Employee Relief Fund for employees facing financial hardship due to unforeseen personal circumstances,such as dealing with significant medical expenses,unexpected eldercare or childcare needs and even funeral expenses for an immediate family member.As we navigate the pandemic,we will continue to evolve our support for our people,always with their safety and well-being top of mind.“In difficult times like during the countrys shutdown,you feel a lot of uncertainty,and you feel like you are alone.With financial assistance like this,you feel you have support and you have people who care.”Halyna,Ralph Lauren Employee Relief Fund grant recipient OUR COMMUNITIESIn March 2020,the Ralph Lauren Corporate Foundation committed$10 million to support COVID-19 relief efforts for our employees,our partners and our communities.Partner and community support included:Contributing to the World Health Organizations COVID-19 Solidarity Response Fund,a global effort to prevent,detect and respond to the pandemic.Supporting the Foundations long-standing network of international institutions that care for people with cancer,who were especially vulnerable during this time.Our Response to COVID-19 Committing an inaugural gift to the Council of Fashion Designers of America and Vogue Fashion Fund to support members of the American fashion community affected by the pandemic.Partnering with the Council of Fashion Designers of America Foundation to donate 250,000 masks and 25,000 isolation gowns to U.S.frontline workers.Our Company also committed 1.5 million clothing products,25,000 meals and other critical supplie,such as face masks and hand sanitizer,to frontline workers and nonprofit organizations around the world.OUR SUPPLY CHAINMany of the countries where our suppliers are based have been hit particularly hard,socially and economically,by the pandemic.We worked to uphold the well-being of workers in our supply chain and support our suppliers through this challenging time.Our actions included:Conducting nearly 270 virtual Supplier Wellness Checks with our suppliers facilities from May to August 2020 in order to understand the challenges they faced and to identify and assess new risks brought on by the pandemic.Extending collaborations with long-term external partners to help us deliver our supply chain empowerment and well-being programs and social compliance program.We also changed our assessment protocols to reduce burdens on suppliers during this challenging time.Sharing adoption costs with our suppliers for enrollment in Zero Discharge of Hazardous Chemicals and the Sustainable Apparel Coalitions Higg Index Facility Environment Moduleupholding the importance of continual environmental improvement,even amid the challenges posed by COVID-19.Helping to ensure workers in our supply chain would still be paid by honoring our payments for all orders produced or in-production and enabling early payment through our supply chain finance program.We remain committed to the safety and well-being of people in our Company,communities and supply chain.While the full effect of the pandemic has yet to be realized,we know the actions we take each day will have a positive impact by supporting and empowering all those affected by the pandemic.The COVID-19 pandemic has impacted people,communities and businesses globally.Throughout the past year,we prioritized keeping our people safe and well,contributing to local and international relief efforts and supporting our suppliers and their workers in the face of unprecedented challenges.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES33PhilanthropyAt Ralph Lauren,philanthropy is core to who we are.We aim to support and empower those in our communities through giving back.The Ralph Lauren Corporation provides funding,including a portion of proceeds from our cause marketing initiatives,to the Ralph Lauren Corporate Foundation6(the Foundation),a distinct charitable entity established in 2001.Combined FY21 contributions from the Company and the Foundation totaled more than$20 million,up from$7 million in FY20.In March 2020,the Foundation committed$10 million toward COVID-19 relief.This funding supported the World Health Organizations COVID-19 Solidarity Response Fund,Ralph Lauren colleagues dealing with financial challenges and members of the American fashion community affected by the pandemic.Learn more about the Companys efforts in Our Response to COVID-19.SOCIAL JUSTICEOur commitment to racial equity extends beyond our Company to broader society.In summer 2020,the Company donated pre-purchased advertising space to Black-and African American-led partner organizations to help raise awareness of systemic racism.We provided billboards in high-traffic areas throughout the U.S.to Phi Beta Sigma Fraternity Inc.,an intercollegiate,historically Black fraternity,and the United Negro College Fund(UNCF).We also donated a full-page print advertisement in The New York Times for UNCF to promote historically Black colleges and universities.Community Engagement&Philanthropy We make a meaningful difference in our communities through our global employee volunteerism and our dedication to social and environmental causes.CANCER CARE AND PREVENTIONFor over 30 years,Ralph Lauren has been committed to raising awareness in the fight against cancer.As part of this commitment,in 2003,the Ralph Lauren Center for Cancer Care was established in the Harlem neighborhood of New York City in partnership with the Memorial Sloan Kettering(MSK)Cancer Center.Now known as the MSK RL Center,its aim remains the same:reduce health disparities and improve cancer outcomes by providing high-quality,compassionate cancer screening,diagnosis and treatment to all.In FY21,the center enhanced its breast cancer prevention and screening program and opened an in-center mammography unit.Our annual Pink Pony campaign underpins our support for hospitals and initiatives that provide cancer care and prevention.Examples of this campaigns worldwide impact in FY21 include:Supporting ONCOVID,a clinical trial in France that will evaluate the impact of COVID-19 on individuals with cancer and how they respond to treatment.Donating to the Deutsches Krebsforschungszentrum(DKFZ)Cancer Research Center in Germany to support their COVID-19 research on diagnostic testing and the development of a vaccine for high-risk groups,including those with cancer.Supporting more than 4,000 patients in New York via the MSK Financial Assistance Program and the Social Work Patient Fund to cover transportation,housing and childcare expenses.The Company also supports The Royal Marsden Cancer Charity in the U.K.We pledged 1 million through FY22 to help establish a research area within the Oak Cancer Centre,which will open by the end of 2022.“We are proud and honored to have such a special and long-standing partnership with Ralph Lauren.Your support over the years has made a difference for cancer patients and their families at The Royal Marsden,across the U.K.and worldwide.”Dame Cally Palmer,Chief Executive,The Royal Marsden 6Previously known as the Polo Ralph Lauren Foundation.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES34LGBTQIA EQUITY AND INCLUSION Our Company has proudly supported the LGBTQIA community for 30 years.In FY21,we launched a Pride campaign that included a unisex Polo Pride collection for adults and children.FY21 was our second year partnering with the Stonewall Community Foundation on our Pride campaign.Stonewall prioritizes and lifts up the most vulnerable members of the LGBTQIA community,including people of color and transgender,gender nonconforming and nonbinary people.Through our partnership with Stonewall,we donate a portion of the purchase price up to 100 percent of each Polo Pride item to LGBTQIA organizations around the world.ACCESS TO CLEAN WATER Worldwide,one in three people do not have access to safe drinking water.7 To help end this disparity,we support organizations working to provide clean water sources for those in need.Through our continued partnership with GiveMeTap,in FY21,we helped fund drinking water projects in rural Africa.We also donate at least$2 for every Polo-branded bottle sold on RalphL to help fund the installation of water pumps across rural Ghana.8 To date,the program has provided 18 water pumps in the Upper West region of Ghana and benefited more than 18,000 people.In FY21,the Foundation expanded its partnership with DigDeep,a nonprofit focused on increasing access to water and sanitation throughout the U.S.Our three-year collaboration will support the COVID-19 emergency water delivery program for Navajo families,helping to ensure safe water access for 1,500 households and to provide 11 families with in-home water systems in 2022.7Water and sanitation United Nations Sustainable Development.(n.d.).Retrieved February 09,2021.8Purchase does not affect funding.All pump funding is by GiveMeTap.Learn more at GiveMeT.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES35Giving Time and TalentDespite a year of change and uncertainty,our employees passion and commitment to support their communities remained strong.While in-person volunteering was suspended due to COVID-19 restrictions,employees found virtual and donation-based opportunities to continue giving back.At the end of FY20,we set a new 2025 target to increase our global employee volunteer hours by 25 percent compared to a FY20 baseline.Although our volunteer hours decreased in FY21 due to COVID-19 restrictions,we are confident that we will reach this 2025 goal through expanded virtual volunteering opportunities and a return to in-person volunteering events.RALPH LAUREN GIVES BACKThe Ralph Lauren Gives Back program enables our employees to volunteer year-round across social and environmental causes,including Pink Pony,Earth Day and Season of Giving.In FY21,we dealt with the restrictions of COVID-19 by adapting our program to create other ways of giving back throughout the year,including introducing the Ralph Lauren Matching Gift program.Through this program,donations of up to$1,000 made to nonprofit organizations by employees who have been with the Company for at least one year will be matched on a one-to-one basis by the Ralph Lauren Corporate Foundation,up to a total of$1 million dollars.A focus this year was providing support for the frontline workers who were tirelessly serving our communities amid COVID-19.In FY21,our Ralphs Coffee truck visited hospitals in New York to provide complimentary coffee and food to hospital staff.We also partnered with The Conduit,Gails Bakery and Rocket Food to provide more than 25,000 meals for Londons frontline workers and their families.Employee Volunteering FY19FY20FY211Volunteer Hours 14,00014,2521 In-person volunteering was canceled in FY21 due to COVID-19 restrictions,including our three weeks dedicated to service through Ralph Lauren Gives Back.Increase global employee volunteering engagement by 25 percent compared to a FY20 baseline2025 GOALVIRTUAL VOLUNTEERISMCOVID-19 changed the way we live and work,including how we support our communities.By adapting our Ralph Lauren Gives Back volunteer program,we ensured employees could stay safe while still helping local nonprofit organizations.We organized virtual volunteering opportunities throughout the year,including Pink Pony in October and Season of Giving in December.To encourage remote participation,we sent push notifications through our“RL Today”mobile app,informing employees about both local and global volunteering opportunities.Local volunteer captains also shared reminders of upcoming events.We adopted a virtual format for events such as AIDS Walk NYC and Light the Night,which supports the Leukemia&Lymphoma Society.This new format allowed our employees around the world to participate safely.FY21 also marked our first year supporting the UNCF Walk to raise funds for educational scholarships.Until in-person volunteering can resume safely,we will continue to find new,remote ways to engage employees in giving back.GLOBAL CITIZENSHIP&SUSTAINABLITY REPORT|CHAMPION BETTER LIVES36THE IMPACT OF COVID-19 ON OUR WORK WITH SUPPLIERSOur Global Citizenship work in the supply chain relies on regular and direct contact with our suppliers.However,travel restrictions and local lockdowns required us to change our approach to supplier assessments and engagement this year.Between May and August 2020,we contacted all our direct suppliers to conduct virtual factory-level Supplier Wellness Checks.We used these checks to understand our suppliers challenges,identify and assess new risks arising from the pandemic and share resources to optimize health and safety.Online meetings,webinars and calls enabled regular and direct dialogue with our suppliers.This enhanced our understanding of risks and issue resolution and allowed us to better engage factories as we moved back to on-site activity,where local restrictions allowed.We also extended collaborations with long-term partners to help us deliver our programs in FY21including BSR,Elevate,the International Finance Corporation(IFC),the International Labour Organization(ILO),Impactt Limited and Taos Network.We leveraged their local expertise to support our capability-building and training efforts in applicable countries.Worker Empowerment&Well-BeingWe are committed to conducting our global operations ethically and with respect for the dignity of all people who make our products.We aim to enrich the quality of work and life for everyone in our supply chain,ensuring they all have the opportunity to reach their full potential in a safe and inclusive environment.RISK ASSESSMENTOur global risk assessment tool helps us identify and evaluate our impacts on people and the environment,including those associated with our supply chain.We worked with a group of external stakeholders to further inform our understanding and prioritization of
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2022ANNUAL SUSTAINABILITY REPORT1Sustainability Report 2022|Wilmar International Limited4Sustainability Report 2022|Wilmar International LimitedTABLE OF CONTENTS PROTECTING THE ENVIRONMENT.32Biodiversity and Conservation.34Climate Change.48Environmental Footprint of Operations.60Sustainable Packaging.76LOOKING AFTER PEOPLE AND COMMUNITIES.82 Talent Management.84 Human Rights and Labour Standards.94Diversity and Inclusion.108Employee Health,Safety and Well-being.116 Economic and Community Contribution.138DELIVERING PRODUCT EXCELLENCE.148 Innovation and Technology.150Consumer Health and Well-being.158Product Marketing and Labelling.164Product Quality and Safety.174TRANSFORMING OUR SUPPLY CHAIN.179Responsible Sourcing and Supply Chain Transformation.180RESPONSIBLE BUSINESS PRACTICES.188Business Ethics and Compliance.190Data Security and Privacy.196APPENDIX.199Materiality.200External Assurance from Ernst&Young LLP.204External Assurance from Control Union Certifications.208Internal Assurance.212Aligning with the Recommendations from the Task Force on Climate-related Financial Disclosures(TCFD).214Supporting the United Nations Sustainable Development Goals(SDGs).218Glossary of Terms.224Glossary of Measurement Units.233ABOUT THIS REPORT03BOARD STATEMENT06SUMMARY OF PROGRESS12ABOUT WILMAR2224OUR APPROACH TO SUSTAINABILITY3Sustainability Report 2022|Wilmar International Limited2Sustainability Report 2022|Wilmar International Limited2-3,2-5Building on 16 years of sustainability disclosures since 2007,we have been constantly enhancing our approach to disclosing relevant,timely and decision-useful information to our stakeholders.In 2022,we have evolved our approach to produce a data-driven and more accessible report that succinctly communicates our sustainability story,while also providing key disclosures on our sustainability performance.We continue to reference and apply a number of standards and frameworks to ensure our report is aligned with global best practices and provides consistent and comparable information to readers.In this regard,this year we have also reported in accordance with the updated GRI Universal Standards 2021,and the recently released sector standard,GRI 13:Agriculture,Aquaculture and Fishing Sectors 2022.ABOUT THIS REPORT11EDITIONTHWelcome to the 11th edition of our Sustainability Report.At Wilmar International Limited(the“Company”or“Wilmar”,together with its subsidiaries,the“Group”),we are committed to creating a positive and sustainable impact,while being transparent and accountable to our stakeholders.THIS REPORT FORMS PART OF A REPORTING SUITE,AND IS INTENDED TO BE READ IN CONJUNCTION WITH OUR:ANNUAL REPORT 2022 ANNUALREPORTPALM NDPE IMPLEMENTATION ANNUAL REPORT 2022 PALMNDPESUSTAINABILITY DASHBOARDBASE DATA TABLES iMATERIALITYiThe content within this report is determined based on our materiality assessment,which is reviewed annually with our third-party sustainability consultants.For more information,please refer to the section onAll photos of people and places used in this Sustainability Report are photographs of Wilmar sites and of past or present Wilmar employees and stakeholders.25Sustainability Report 2022|Wilmar International Limited4Sustainability Report 2022|Wilmar International LimitedAligned with our financial reporting cycle,this report contains data and information in respect of the financial year(FY)ended 31 December 2022.Unless otherwise stated,this report covers all subsidiaries across our business segments.The Groups business segments include the following:(1)Plantation and Sugar Milling;(2)Feed and Industrial Products;and(3)Food Products.Performance data on social(S)and governance(G)cover all subsidiaries.Data on environmental(E)indicators cover all subsidiaries and also include joint ventures and associates where we have operational control.With a proactive approach to data consolidation amidst a rapidly expanding business,we continue to onboard recently acquired businesses and commissioned sites into our global safety and environmental data reporting platform and strive to complete these additions within six months of acquisition or commissioning.This platform centralises the approach towards consolidating information across our material topics.Ernst&Young LLP(EY)provided independent,limited assurance on selected disclosures in this report.Material disclosures related to our palm value chain have been assured by Control Union Certifications(CU).More details can be found in the Assurance Statements on pages 204 211.Wilmars Board of Directors,through the Board Sustainability Committee(BSC),have oversight of the subject matter covered by the assured figures and statements in this report.In line with SGXs enhanced sustainability reporting regime,Wilmars Internal Audit Department will progressively conduct internal assurance on the Groups sustainability reporting process.Our internal audit plan is for our internal assurance process to complement our external assurance,by assessing material topics that are not externally assured.For details on the internal assurance conducted for this reporting cycle,please refer to the Internal Assurance Statement on pages 212 of this report.SCOPE AND BOUNDARY EXTERNAL ASSURANCEINTERNAL ASSURANCE2-3,2-2 2-5 GRI 1REPORTING FRAMEWORKSCONTACT 2-3We strive to remain cognisant,responsive and inclusive.We welcome any comments,questions or suggestions regarding this report and our sustainability performance.Wilmar International Limited 28 Biopolis Road Singapore 138568 Attention:Sustainability Department .sgE-MAILPOSTSTANDARDAPPLICATION OF STANDARDLINK TO CONTENT/DISCLOSURE INDEXGRIWilmar has reported in accordance with the GRI Standards for this report References to the GRI disclosures are denoted throughout the report using the notation:XX-XX GRI CONTENT INDEX SASBWilmar has reported disclosures recommended by the SASBs:Agricultural Products Sustainability Accounting Standard(Industry Standard,Version 2018-10)Processed Food Sustainability Accounting Standard (Industry Standard,Version 2018-10)These disclosures are denoted throughout the report using the notations:FB-AG-XXXX.X and FB-PF-XXXX.X SASB DISCLOSURE INDEX UN GUIDING PRINCIPLES REPORTING FRAMEWORKSince our Annual Sustainability Report 2021,we continue to report based on the UN Guiding Principles Reporting Framework UN GUIDING PRINCIPLES REPORTING FRAMEWORK INDEXTCFDOur climate change disclosures are based on TCFD recommendations TCFD DISCLOSURE INDEX SGXThis report complies with the requirements of the Singapore Exchange Securities Trading Limiteds(SGX-ST)Listing Rules 711A,711B and Practice Note 7.6(Sustainability Reporting Guide)-57Sustainability Report 2022|Wilmar International Limited6Sustainability Report 2022|Wilmar International LimitedThe world has faced a number of challenges in the past year,presenting both risks and opportunities for our businesses.The ongoing economic crisis,geopolitical instability and the increasing threat of climate change,remain some of the key issues impacting our stakeholders and operating environment.Confronted with these challenges,it is even more important that Wilmar remains committed to driving sustainability across our value chain as a strategic priority as we believe this is imperative to building a resilient business that will continue to create value for our stakeholders over the short,medium and long-term.Since our last report,we have been improving and enhancing our approach to provide transparent,comparable and decision-useful information to our stakeholders.We appreciate that while there are a number of growing disclosure requirements,our stakeholders value succinct and focused information.Therefore beginning this year,we have revised our reporting approach to be more data-driven and streamlined,focusing on disclosure requirements and performance updates related to our material Environmental,Social and Governance(ESG)topics.Cognisant of the importance of fully communicating our sustainability initiatives,we are also tapping on various other channels to add detail and colour to our ESG data disclosure,including our corporate website,sustainability dashboard,dedicated annual No Deforestation,No Peat,No Exploitation(NDPE)Implementation Report and real-time communication channels such as newsletters and social media.Dear Stakeholders,We are proud to present the 2022 edition of our Sustainability Report,which marks 16 years of sustainability disclosures by Wilmar.BOARD STATEMENT KUOK KHOON HONGChairman and Chief Executive OfficerPUA SECK GUANGREGORY MORRISSOH GIM TEIKJUAN RICARDO LUCIANOTONG SHAO MINGKUOK KHOON EANKISHORE MAHBUBANILOUIS CHEUNGExecutive Director and Chief Operating Officer(Part-Time)Non-Executive and Non-Independent DirectorNon-Executive and Independent DirectorAlternate Director to Mr Gregory MorrisAlternate Director to Mr Kuok Khoon HuaNon-Executive andNon-Independent DirectorNon-Executive and Independent DirectorNon-Executive and Independent DirectorTEO LA-MEIExecutive Director,Group Legal Counsel and Company SecretaryLIM SIONG GUANNon-Executive and Lead Independent DirectorCHONG YOKE SINNon-Executive and Independent DirectorKUOK KHOON HUANon-Executive and Non-Independent DirectorTEO SIONG SENGNon-Executive and Independent DirectorJESSICA CHEAMNon-Executive and Independent Director In addition to the standards and frameworks we have previously referenced to guide our reporting,such as the Sustainability Accounting Standards Board(SASB)Standards and Task Force on Climate-related Financial Disclosures(TCFD)recommendations,this Sustainability Report has adopted the newly updated Global Reporting Initiative(GRI)Standards 2021,including the new sector standard GRI 13:Agriculture,Aquaculture and Fishing Sectors 2022.We believe these improvements enhance our reporting to stakeholders,better meeting their needs and expectations.These standards are the most widely adopted for sustainability reporting globally and enhance the comparability and quality of ESG disclosures for our various stakeholder groups.Wilmar is committed to upholding accountability,transparency and engagement with our stakeholders as fundamental principles that guide our endeavours to foster sustainability across our businesses.16YEARS OF SUSTAINABILITY DISCLOSURESReflects the retirement of MR KWAH THIAM HOCK and MR TAY KAH CHYE as well as the appointment of DR LOUIS CHEUNG and MS JESSICA CHEAM on 20 April 2023.BOARD COMPOSITION AS AT 20 APRIL 20237Sustainability Report 2022|Wilmar International Limited9Sustainability Report 2022|Wilmar International Limited8Sustainability Report 2022|Wilmar International LimitedWhile we are proud of our achievements,we are cognisant that there is more work to be done and we continue to make progress on our sustainability commitments.Climate change impacts are already being felt across the world and the importance of climate action cannot be overstated.In 2022,we made significant strides in our commitment to mitigate climate change,signing up to the Science Based Targets Initiative(SBTi)and committing to develop timebound plans to achieve near-term and net-zero emission reduction targets.TAKING CLIMATE ACTION Despite what has been a challenging year,Wilmar maintained a strong financial performance.For FY2022,we reported a record net profit of US$2.40 billion,a 27.1%increase(FY2021:US$1.89 billion)from the previous financial year.We credit our continued ability to do well,to the embracing of sustainability at the core of our business.At Wilmar,sustainability is embedded in the way we run our business,from the strategic decision-making at Board level,which is supported by the BSC,to the way we run our operations and source responsibly from our supply chain.The BSC is responsible for Wilmars ESG governance by formulating strategies,identifying risks and opportunities to determine the Groups material ESG factors,evaluating our ESG performance and targets as well as monitoring the implementation of ESG-related policies and practices.We are very pleased to see that our sustainability progress and performance have again been recognised by several global rating benchmarks and awards.In 2022,Wilmar retained its top position globally in the Sustainable Palm Oil Transparency Toolkit(SPOTT)assessment among 100 palm oil producers,processors and traders while our effort in protecting human rights was recognised by the Global Child Forum and the Corporate Human Rights Benchmark(CHRB).The Global Child Forum ranked Wilmar as the best performing company in its Food,Beverage and Personal Care benchmark,with the company scoring a perfect 10 for our effort in safeguarding childrens rights and well-being.CHRB,who evaluates how human rights and responses to serious allegations are systematised by companies through policies and processes,ranked Wilmar second globally and first in the East Asia and Pacific region.In addition,Wilmar maintained its inclusion in the Dow Jones Sustainability Indices(DJSI)World Index,making 2022 the second consecutive year Wilmar remained on the DJSI World Index and our third straight year on the DJSI Asia Pacific Index.Wilmar also retained its position in the FTSE4Good Developed Index and FTSE4Good ASEAN 5 Index.Wilmars sustainability track record and good standing have enhanced our ability to secure sustainable financing compared to the previous financial year.We secured more sustainability-linked loans(SLLs)this year,bringing the total amount of sustainable financing that we have secured to over US$2.20 billion as at the end of December 2022.Our sustainable financing includes facilities with DBS Bank Ltd.,Oversea-Chinese Banking Corporation Limited,The Bank of East Asia,Limited,among others.The continued interest from banks to link sustainability to our borrowing provides a strong incentive for us to secure more of such loans and is a testament to the importance of sustainability in our business model and strategy.OUR ACHIEVEMENTS IN 2022 IN SEVERAL GLOBAL RATING BENCHMARKS AND AWARDSRETAINED TOP POSITIONSBILLIONBILLIONRECORD NET PROFIT FOR FY2022(27.1%INCREASE FROM FY2021)SECURED AMOUNT OF SUSTAINABLE FINANCING AT THE END OF DECEMBER 2022US$2.40US$2.20At Wilmar,sustainability is embedded in the way we run our business,from the strategic decision-making at Board level,to the way we run our operations and source responsibly from our supply chain.As part of this journey,we have established our Scope 1 and 2 greenhouse gas(GHG)footprint for our baseline year of 2020,which has been externally audited in 2022.We have also completed the mapping of the Groups 2020 Scope 3 GHG footprint to complete our emissions profile for target setting.We continue to make progress towards the commitment made at COP26 in Glasgow to develop a sectoral roadmap for enhanced supply chain action and at COP27 in Sharm El Sheikh to follow through with this sectoral roadmap on a commodity-by-commodity basis.We are actively engaging peers to participate in the palm oil sectoral roadmap to accelerate supply chain action and reduce emissions from our value chain.Please refer to the section on the Palm Oil Sector in this publication by the Tropical Forest Alliance for more information.For more information,please refer to the chapters in this Report onCLIMATE CHANGEiandENVIRONMENTAL FOOTPRINT OF OPERATIONSTree planting at our Sapi Estate operations,Sabah,Malaysia11Sustainability Report 2022|Wilmar International Limited10Sustainability Report 2022|Wilmar International LimitedTRACEABILITY TO PLANTATIONSTRACEABILITY TO PALM OIL MILLSOUR COMMITMENT TO ATTAIN 90%TtP ACROSS OUR GLOBAL SUPPLY CHAIN BY 2023ACHIEVED ACROSS OUR GLOBAL SUPPLY CHAIN IN 202290.7%Since 2015,we have achieved 100%traceability to plantations(TtP)for all of the mills that we own across our global operations.In 2022,we committed to attaining 90%TtP across our global supply chain by 2023.We are pleased to note that as at end 2022,we have achieved over 80%TtP across our global supply chain.We have also achieved 98.7%traceability to palm oil mills across our global supply chain in 2022.Traceability aids transparency and enhances our ability to monitor,engage and report against our goals and initiatives,while we strive for and maintain a deforestation and exploitation-free supply chain.Our ground-breaking No Deforestation,No Peat and No Exploitation(NDPE)commitment serves as a crucial foundation and blueprint for sustainable practices across our palm operations and supply chain.Our NDPE Policy was launched in 2013,making Wilmar the first in the industry to launch such a policy and apply it to our entire palm oil supply chain.Since then,we have been a leading voice in guiding and influencing the industry towards greater sustainability.One such example is our renewed partnership with the South East Asian Rainforest Research Partnership(SEARRP)on a Memorandum of Understanding(MoU)for a five-year term.This partnership seeks to advance and support best practices of oil palm plantations and conservation areas and will add to our overall ability to maintain our conservation areas,including their biodiversity viability.In September 2021,we launched a dedicated NDPE Sugar Policy and the NDPE Sugar Initiative for our sugar supply chain.In 2022,our NDPE Sugar label made its debut on a customers retail package of table sugar,enhancing the visibility of sustainability within our sugar supply chain.As one of the largest sugar traders in the world,we believe that we can make a positive impact by producing sugarcane in an environmentally sustainable manner that also benefits the livelihoods of people and communities involved in producing sugar.PROGRESS ON OUR SUSTAINABILITY COMMITMENTS Beyond progress on environmental fronts,we also saw a marked improvement in our Occupational Health and Safety(OHS)performance.Wilmar places utmost importance on providing a safe and healthy workplace for its 100,000 strong workforce across the globe and OHS is a top area of concern for the Group.We always strive for zero fatalities and zero injuries.Every year,we look closely at how we can continue to improve in this area.This year,we saw our Lost Time Injury Rate(LTIR)performance improve with a drop of 18.7%and we also recorded a significant drop in the number of fatalities.While we are pleased to see that efforts to strengthen our OHS performance are showing results,this is an area where we recognise we need to do more and we will continue to work towards zero fatalities and safeguarding the health and well-being of our employees.At Wilmar,we recognise that our success is the direct result of our employees dedication and hard work.To help our employees thrive,we constantly strive to foster a diverse and inclusive culture befitting our global workforce.A key focus area for us is the protection of womens rights both in the office and out in the plantations.We began establishing womens committees in our oil palm plantations in 2007 to uphold our Womens Charter.Since 2020,Womens Working Groups(WoW)or Gender Committees have been established in 100%of our oil palm plantations in Indonesia,Malaysia,Nigeria and Ghana.At Wilmar,we recognise that our success is the direct result of our employees dedication and hard work.IN 2022,OUR NDPE SUGAR LABEL MADE ITS DEBUT ON A CUSTOMERS RETAIL PACKAGE OF TABLE SUGAR,ENHANCING THE VISIBILITY OF SUSTAINABILITY WITHIN OUR SUGAR SUPPLY CHAINNDPE SUGAR LABELDespite our strong performance and progress thus far,the year ahead remains challenging amid the current global context.We are committed to staying ahead of the curve and are proactively adapting to the continuously evolving ESG and sustainability landscape,including initiatives such as the European Green Deal which seeks to promote deforestation-free products.We are also committed to comply with the European Unions regulations requiring companies to conduct due diligence to ensure that their supply chains are free from forced labour and other forms of modern slavery.In this regard,our NDPE priorities remain fundamental to meeting these mandates.In 2023,our focus will be on accelerating action to achieve the commitments and targets we have set.We will continue to partner and collaborate with industry players and across sectors to make this happen.BOARD OF DIRECTORS,WILMAR INTERNATIONAL LIMITED 29 MAY 2023 LOOKING AHEAD 13Sustainability Report 2022|Wilmar International Limited12Sustainability Report 2022|Wilmar International LimitedSUMMARY OF PROGRESSCLIMATE CHANGE 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS NO DEFORESTATION(ongoing):No development on High Carbon Stock(HCS)forests or High Conservation Value(HCV)areas No burning in the preparation of new planting and re-planting of any other development NO NEW DEVELOPMENT ON PEATLAND regardless of depth(ongoing)MAINTAIN BEST MANAGEMENT PRACTICES for existing plantations on peat(ongoing)SAFEGUARD BIODIVERSITY in Wilmars operational areas RESTORE AND REHABILITATE 120 HECTARES(HA)of degraded forest and planted area to improve connectivity of Sekar Imej Conservation Area(SICA)Project PROTECT RARE,THREATENED AND ENDANGERED(RTE)SPECIES of wildlife for long-term viability of the species ZERO DEFORESTATION AND ZERO NEW DEVELOPMENT ON PEATLAND in Wilmars landbank 32,544 HA OF HCV AREAS AND HCS FORESTS SET ASIDE as conservation area in our oil palm plantations in Indonesia,Malaysia,Ghana and Nigeria(about 10%of our total landbank).This includes 97 HA added to our conservation area in 2022,mainly from our Sabah plantations 834 HA of additional conservation area at our sugarcane plantations and mills in Australia and India RENEWED PARTNERSHIP with the South East Asian Rainforest Research Partnership(SEARPP)in 2022 for a five-year term,which focuses on Wilmars NDPE commitments to develop research-led programmes for the restoration and rehabilitation of forests and habitats NO DEFORESTATION(ongoing):No development on HCS forests or HCV areas No burning in the preparation of new planting and re-planting of any other development NO NEW DEVELOPMENT ON PEATLAND regardless of depth(ongoing)MAINTAIN BEST MANAGEMENT PRACTICES for existing plantations on peat(ongoing)SAFEGUARD BIODIVERSITY in Wilmars operational areas(ongoing)PROTECT RTE SPECIES of wildlife for long-term viability of the species(ongoing)PUBLISH BEST MANAGEMENT PRACTICE GUIDELINES ON CONSERVATION for West Africa by 2024(ongoing)2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS As part of our JOINT STATEMENT PLEDGING OUR COMMITMENT TO A SECTORAL ROADMAP FOR ENHANCED SUPPLY CHAIN ACTION TO ALIGN WITH GLOBAL CLIMATE GOALS,we aimed to achieve the following:Map the Groups Scope 3 GHG emissions to form a complete inventory of our total GHG emissions for 2020,our baseline year Develop comprehensive targets consistent with a 1.5-degree Celsius pathway and aligned with the Science Based Targets initiative(SBTi).These targets will also be linked to our energy and water efficiency programmes COMPLETED THE MAPPING OF THE GROUPS SCOPE 3 GHG EMISSIONS for baseline year 2020 which will be used to identify the priority areas for us to focus on in our climate roadmap Please refer to the section on Responsible Sourcing and Supply Chain Transformation and the Palm NDPE Implementation Annual Report 2022 for our progress on supply chain traceability DEVELOP COMPREHENSIVE TARGETS consistent with a 1.5-degree Celsius pathway and aligned with the SBTi.These targets will also be linked to our energy and water efficiency programmes(ongoing)ENSURE ALL SUPPLIERS PALM OIL VOLUMES ARE IN THE“DELIVERING”CATEGORY of the NDPE IRF(Implementation Reporting Framework)by 2025 and that such progress is reported annually(ongoing)BIODIVERSITY AND CONSERVATION(continuation)2021 COMMITMENTS/TARGETS2022 PROGRESS PUBLISH BEST MANAGEMENT PRACTICES GUIDELINES ON CONSERVATION for Indonesia,Malaysia and West Africa by 2024 PUBLISH EDUCATIONAL MATERIALS to promote biodiversity conservation in the plantation landscape FIRST SCIENTIFIC EXPEDITION to the SICA Project aimed at studying and documenting the flora and fauna,assessing forest quality and estimating carbon stocks PLANTED OVER 30,000 TREES FROM 89 SPECIES in areas beyond our Malaysian operations designated conservation and riparian areas through the Conservation Recreational Landscape Project(CRLP)since its initiation REINTRODUCED 23 SIAMANGS(Symphalangus syndactylus)into the wild through the Siamang Reintroduction Programme PUBLISHED:Best Management Practices Manual for Growers on Forest Conservation and Community Collaboration in Bahasa Indonesia and English A Practical Guidance to Conservation Area Monitoring in Bahasa Melayu and Bahasa Indonesia Newsletter series on conservation efforts in Wilmars operational area in MalaysiaBIODIVERSITY AND CONSERVATION 15Sustainability Report 2022|Wilmar International Limited14Sustainability Report 2022|Wilmar International LimitedSUSTAINABLE PACKAGING 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS IMPROVE MATERIAL EFFICIENCY FOR PLASTIC TYPES including polyethylene terephthalate(PET),high-density polyethylene(HDPE)and polypropylene(PP)to reduce plastic consumption by 3,000 MT per year Through Yihai Kerry Arawanas(YKA)“Sustainable Packaging 2025 Plan”,YKA targets to REDUCE THE USE OF PACKAGING MATERIALS BY 15,000 MT from a 2020 baseline 100%OF GOODMAN FIELDERS PACKAGING MATERIALS TO BE SUSTAINABLE.In the interim,we target 100%of packaging to be reusable,recyclable or compostable by 2025 including:Phasing out problematic and unnecessary single-use plastic packaging Meeting the standards set out in the Packaging Recyclability Evaluation Portal(PREP),the Australasian Recyclability Label(ARL),or similar programmes REDUCED PLASTIC CONSUMPTION BY 3,318 MT in 2022 As at the end of December 2022,YKA REDUCED PACKAGING WASTE BY 6,419 MT,more than 40%of its target OVER 94%OF GOODMAN FIELDERS PACKAGING IS RECYCLABLE OR REUSABLE with projects identified to achieve 100%IMPROVE MATERIAL EFFICIENCY FOR PLASTIC TYPES including PET,HDPE and PP to reduce plastic consumption by 3,000 MT per year(ongoing)Through YKAs“Sustainable Packaging 2025 Plan”,YKA targets to REDUCE THE USE OF PACKAGING MATERIALS BY 15,000 MT from a 2020 baseline 100%OF GOODMAN FIELDERS PACKAGING MATERIALS TO BE SUSTAINABLE.In the interim,we target 100%of packaging to be reusable,recyclable or compostable by 2025 including:Phasing out problematic and unnecessary single-use plastic packaging Meeting the standards set out in the PREP,the ARL,or similar programmesENVIRONMENTAL FOOTPRINT OF OPERATIONS(continuation)2022 PROGRESSCURRENT COMMITMENTS/TARGETS INCREASED THE TOTAL INSTALLED POWER CAPACITY OF PV PLANTS in China to 60 MWp as of end 2022,with another 74 MWp capacity in the pipeline from planned projects or projects currently GOODMAN FIELDER HAS ACHIEVED 100%RENEWABLE ELECTRICITY for its operations in Australia and New Zealand through the purchase of renewable energy certificates since 2021 MAINTAIN RENEWABLE ENERGY ACROSS GOODMAN FIELDERS OPERATIONS through the procurement of renewable electricity certificates by 2025(ongoing)HALVE FOOD WASTE in Goodman Fielders Australian operations by 2030 based on 2021 baselineCLIMATE CHANGE(continuation)2021 COMMITMENTS/TARGETS2022 PROGRESS To ensure all suppliers palm oil volumes are in the“Delivering”category of the NDPE IRF(Implementation Reporting Framework)by 2025 and that such progress is reported annually REDUCE OUR GHG EMISSIONS INTENSITY BY 15%for all of our palm oil mills in Indonesia,Malaysia,Ghana and Nigeria,regardless of RSPO certification status by 2023,against a 2016 baseline of 0.82 tCO2e per MT crude palm oil(CPO)The GHG emissions intensity in 2022 was 0.68 tCO2e PER MT CPO for our palm oil mills in Indonesia,Malaysia,Ghana and NigeriaENVIRONMENTAL FOOTPRINT OF OPERATIONS 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS REDUCE WATER CONSUMPTION INTENSITY(m/MT FFB processed)for palm oil mills from a 2016 baseline with the following targets by 2023:Indonesia:1.2 m/MT FFB Malaysia,Ghana and Nigeria:1.3 m/MT FFB REDUCE ENERGY INTENSITY across our Australia and New Zealand sugar refinery operations from a 2020 baseline by:5%by the end of 2022 20%by the end of 2030 INCREASE INSTALLED CAPACITY OF PHOTOVOLTAIC(PV)POWER PLANTS across China factories to 200 MWp by 2030 100%RENEWABLE ENERGY across Goodman Fielders operations through procurement of renewable electricity certificates by 2025 WATER CONSUMPTION INTENSITY TARGETS ACHIEVED:Indonesia:1.04m3/MT FFB#in Central Kalimantan and 0.93m3/MT FFB#in Sumatra Nigeria:1.16 m3/MT FFB#Although hindered by project delays due to the COVID-19 pandemic,we have CONTINUED TO IMPLEMENT ENERGY EFFICIENCY PROJECTS in our Australia and New Zealand sugar refinery operations scheduled for completion in 2023.Our efforts thus far have resulted in a 1.2%reduction in energy intensity REDUCE WATER CONSUMPTION INTENSITY(m/MT FFB processed)for palm oil mills from a 2016 baseline with the following targets by 2023:Indonesia:1.2 m/MT FFB Malaysia,Ghana and Nigeria:1.3 m/MT FFB (ongoing)REDUCE ENERGY INTENSITY across our Australia and New Zealand sugar refinery operations from a 2020 baseline by:20%by the end of 2030(ongoing)INCREASE INSTALLED CAPACITY OF PV POWER PLANTS across China factories to 200 MWp by 2030#EY has performed limited assurance procedures on these figures.17Sustainability Report 2022|Wilmar International Limited16Sustainability Report 2022|Wilmar International LimitedTALENT MANAGEMENT DIVERSITY AND INCLUSION 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETSContinue to DELIVER CONTENT AND MANAGE OUR TRAINING NEEDS on Litmos Spent over US$3.76 MILLION on employee training and development 15 HOURS of training attended on average per employee Continue to DELIVER CONTENT AND MANAGE OUR TRAINING NEEDS on Litmos(ongoing)2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS MAINTAIN A DIVERSE AND INCLUSIVE WORKPLACE in accordance with our:Equal Opportunity Policy,Womens Charter,and Sexual Harassment,Violence and Abuse,Reproductive Rights Policy 27%OF MANAGEMENT POSITIONS ARE HELD BY WOMEN;female employees account for 24%of our global Group headcount 100%OF OUR OIL PALM PLANTATIONS in Indonesia,Malaysia,Nigeria and Ghana have Womens Working Groups(WoW)or Gender Committees EMPLOYS 85 EMPLOYEES WITH DISABILITIES across our global operations,which accounts for 0.07%of our total workforce ADOPTED AN UPDATED BOARD DIVERSITY POLICY which includes quantitative gender diversity targets of increasing female representation on the Board to 25%by 2025 and 30%by 2030 MAINTAIN A DIVERSE AND INCLUSIVE WORKPLACE in accordance with our:Equal Opportunity Policy,Womens Charter,and Sexual Harassment,Violence and Abuse,Reproductive Rights Policy (ongoing)BOARD DIVERSITY POLICY WITH QUANTITATIVE GENDER DIVERSITY TARGETS of increasing female representation on the Board to 25%by 2025 and 30%by 2030HUMAN RIGHTS AND LABOUR STANDARDS 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS PROVIDE ALL PALM OIL WORKERS WITH ACCOMMODATION CHOICES Nigeria:by 2025 Ensure all employees and contractors are PAID AT LEAST THE APPLICABLE LOCAL MINIMUM WAGE in line with legal regulations and LOCAL LIVING WAGES,where available ASSESS OUR SUPPLIERS by using our Supplier Reporting Tool(SRT)to determine if they are paying their employees and contractors a living wage PROTECT AND SAFEGUARD THE RIGHTS OF CHILDREN throughout our operations by supporting childrens education and having zero tolerance for child labour or exploitation 38%of permanent workers are provided housing in Nigeria ASSESSED 100%OF OUR EMPLOYEES AND CONTRACTORS to ensure that they are paid a living wage ENGAGED 100%OF OUR SUPPLIERS who are part of the SRT programme to determine if they are paying their employees and contractors a living wage BUILT SCHOOLS AND CRCHES in all of our oil palm plantations In 2022,we supported 12,093 CHILDREN of compulsory school-going age(89.5%#of children in our plantations)in their education CONDUCTED MORE THAN 40 TRAINING SESSIONS on human rights-related topics,with MORE THAN 600 SUPPLIERS participating globally since 2015 PROVIDE ALL PALM OIL WORKERS WITH ACCOMMODATION CHOICES Nigeria:by 2025(ongoing)Ensure all employees and contractors are PAID AT LEAST THE APPLICABLE LOCAL MINIMUM WAGE in line with legal regulations and LOCAL LIVING WAGES,where available(ongoing)ASSESS OUR SUPPLIERS by using our SRT to determine if they are paying their employees and contractors a living wage(ongoing)PROTECT AND SAFEGUARD THE RIGHTS OF CHILDREN throughout our operations by supporting childrens education and having zero tolerance for child labour or exploitation(ongoing)EMPLOYEE HEALTH,SAFETY AND WELL-BEING 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS REDUCE LOST TIME INJURY RATE(LTIR)by 40%by 2025 from 2020 baseline ZERO CASES of work-related fatalities INCREASE REPORTING RATE OF HAZARDS AND NEAR MISSES BY 40%by 2025 from 2020 baseline.To achieve CLOSURE RATE OF 90%for these hazards and near misses disclosed LTIR REDUCED BY APPROXIMATELY 18.7%from 0.75 in 2021 to 0.61 in 2022 10#FATALITIES involving 4#employees and 6#contractors A TOTAL OF 117,093 CASES of near misses and hazards were disclosed between 2020 and 2022.Achieved a CLOSURE RATE OF 99%for these cases REDUCE LTIR by 40%by 2025 from 2020 baseline(ongoing)ZERO CASES of work-related fatalities(ongoing)INCREASE REPORTING RATE OF HAZARDS AND NEAR MISSES BY 40%by 2025 from 2020 baseline.To achieve CLOSURE RATE OF 90%for these hazards and near misses disclosed#EY has performed limited assurance procedures on these figures.#EY has performed limited assurance procedures on these figures.19Sustainability Report 2022|Wilmar International Limited18Sustainability Report 2022|Wilmar International Limited2021 COMMITMENTS/TARGETS2022 PROGRESSCONTINUE CONTRIBUTING TO COMMUNITY INVESTMENT AND PHILANTHROPIC ACTIVITIES that support education,health,well-being and community welfare initiatives OVER US$24.54 MILLION CONTRIBUTED to community investment and philanthropic activities EMPLOYEE HEALTH,SAFETY AND WELL-BEING (continuation)2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS ACHIEVE 95%COMPLIANCE to Wilmar High Risk Work(HRW)Standards by 2025.This is to develop a risk management culture where risks are consistently identified and mitigated 95%INCREASE TO THE NUMBER OF EMPLOYEES TRAINED on HRW Standards by 2025 from 2020.This is to enhance the environment,health and safety(EHS)awareness and competencies of our workforce Based on the HRW Campaign launched in 2022,WILMAR ACHIEVED A SCORE OF 87.1%ON THE HRW GAP ASSESSMENT Learning Management Systems for Safety and Health ACHIEVED 4,012 ACTIVE USERS,which is an 80%increase from 2,226 users in 2021 24.3%OF WILMAR OPERATIONS ARE CERTIFIED to ISO 14001 and 16.9%to ISO 45001 as of 2022 ACHIEVE 95%COMPLIANCE to Wilmar HRW Standards by 2025.This is to develop a risk management culture where risks are consistently identified and mitigated 95%INCREASE TO THE NUMBER OF EMPLOYEES TRAINED on HRW Standards by 2025 from 2020.This is to enhance the EHS awareness and competencies of our workforce2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS YKAs R&D Centre pledged to INVEST OVER US$15.72 MILLION to support scientific research and development by 2030 OVER 500 R&D PROJECTS across our global operation focused on the following areas:advancing agricultural practices optimising factory processes enhancing product quality across different segments studying food science to understand the health benefits of various ingredients plant-based protein products YKAs R&D Centre PLEDGED OVER US$15.72 MILLION to support scientific research and development by 2030(ongoing)ECONOMIC AND COMMUNITY CONTRIBUTION INNOVATION AND TECHNOLOGY CONSUMER HEALTH AND WELL-BEING 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS Continue to provide people with ACCESS TO AFFORDABLE,HEALTHY AND NUTRITIOUS FOOD by improving the formulation of our current products and develop new ranges of food with specific health or nutrition attributes Continue to provide TRANSPARENT PRODUCT INFORMATION in our food labels,as well as educate our consumers about health and well-being In collaboration with the Chinese Nutrition Society,YKA PLEDGED OVER US$15.72 MILLION ACROSS 10 YEARS to support scientific research and development in food science,which resulted in the development of black highland barley Tartary buckwheat noodles which is conducive to blood glucose stability and is suitable for diabetics.More healthy and nutritious oils have also been developed alongside plant-based protein products As of 2022,8 ISSUES OF WILMAR NUTRITION NEWSLETTER informing employees of news relating to Wilmars clinical trials,nutrition and health have been published.Wilmar Sugar continues to SHARE TRANSPARENT INFORMATION about how sugar affects our health and actively communicates this to relevant stakeholders Continue to provide people with ACCESS TO AFFORDABLE,HEALTHY AND NUTRITIOUS FOOD by improving the formulation of our current products and develop new ranges of food with specific health or nutrition attributes(ongoing)Continue to provide TRANSPARENT PRODUCT INFORMATION in our food labels,as well as educate our consumers about health and well-being(ongoing)PRODUCT MARKETING AND LABELLING 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS ACHIEVE ROUNDTABLE ON SUSTAINABLE PALM OIL(RSPO)CERTIFICATION for all our palm oil management units(mills and supplying plantations)by 2025 29*OUT OF 36 mills are RSPO-certified(80.6%*)81.1%*OR 251,905.65 HA*of our oil palm plantations are RSPO-certified 15*OUT OF 34 MILLS are ISPO-certified(44%*)ACHIEVE RSPO CERTIFICATION for all our palm oil management units(mills and supplying plantations)by 2025(ongoing)*CU has conducted limited assurance procedures on these figures.21Sustainability Report 2022|Wilmar International Limited20Sustainability Report 2022|Wilmar International LimitedPRODUCT MARKETING AND LABELLING (continuation)2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS ACHIEVE INDONESIAN SUSTAINABLE PALM OIL(ISPO)CERTIFICATION for all our mills in Indonesia by 2025,in line with the Indonesian government legislation on ISPO COMPLETE ISPO CERTIFICATION audits for our 10 independent palm oil mills in Indonesia by 2025,in line with the Indonesian government legislation on ISPO CONTINUE TO COMPLY WITH RELEVANT REGULATIONS AND INDUSTRY CODES to ensure we meet the highest standards of responsible product marketing and labelling 5*OUT OF 10 INDEPENDENT PALM OIL MILLS completed ISPO certification audits(50%*)100%OF PALM OIL MILLS(9*)AND OIL PALM PLANTATIONS(20*)in Malaysia are MSPO-certified NO INCIDENTS AND NO FINES INCURRED in relation to non-compliance with industry codes or regulatory requirements on product labelling or marketing in 2022 Our sugarcane plantations in Australia are 100CREDITED BY SMARTCANE BEST MANAGEMENT PRACTICES ACHIEVE ISPO CERTIFICATION for all our mills in Indonesia by 2025,in line with the Indonesian government legislation on ISPO(ongoing)COMPLETE ISPO CERTIFICATION audits for our 10 independent palm oil mills in Indonesia by 2025,in line with the Indonesian government legislation on ISPO(ongoing)CONTINUE TO COMPLY WITH RELEVANT REGULATIONS AND INDUSTRY CODES to ensure we meet the highest standards of responsible product marketing and labelling(ongoing)2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS Continue to maintain ZERO FOOD-SAFETY RELATED INCIDENTS CERTIFY 100%OF OUR FOOD AND FOOD INGREDIENT FACTORIES above 5,000 sqm to a food safety certification scheme accredited by the Global Food Safety Initiative(GFSI)by 2024 PASS ALL GOOD MANUFACTURING PRACTICES(GMP)INSPECTIONS with no serious findings ZERO RECALLS ISSUED for food safety reasons 76%OF OUR FOOD AND FOOD INGREDIENT FACTORIES ABOVE 5,000 SQM ARE CERTIFIED,based on our pilot tracking on Indonesia,Malaysia and Goodman Fielders businesses 25%OF FACTORIES PASSED GMP INSPECTION without serious findings,out of which 80%were unannounced inspection.254 inspections were conducted in 2022,of which 69%were unannounced Continue to maintain ZERO FOOD-SAFETY RELATED INCIDENTS(ongoing)CERTIFY 100%OF OUR FOOD AND FOOD INGREDIENT FACTORIES above 5,000 sqm to a food safety certification scheme accredited by the GFSI by 2024 PASS ALL GMP INSPECTIONS with no serious findings(ongoing)PRODUCT QUALITY AND SAFETY 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS MAINTAIN NO INCIDENTS of anti-competitive behaviour,monopolistic practice or corruption cases involving Wilmar MAINTAIN NO SIGNIFICANT INCIDENTS OF NON-COMPLIANCE with any relevant environmental and socio-economic laws or regulations in our operations NO REPORTED INCIDENTS OF CORRUPTION CASES INVOLVING WILMAR OR OUR EMPLOYEES.There were also no significant incidents of non-compliance with any relevant environmental and socio-economic laws or regulations in our operations MAINTAIN NO INCIDENTS of anti-competitive behaviour,monopolistic practice or corruption cases involving Wilmar(ongoing)MAINTAIN NO SIGNIFICANT INCIDENTS OF NON-COMPLIANCE with any relevant environmental and socio-economic laws or regulations in our operations(ongoing)RESPONSIBLE SOURCING AND SUPPLY CHAIN TRANSFORMATION 2021 COMMITMENTS/TARGETS2022 PROGRESSCURRENT COMMITMENTS/TARGETS 100%TRACEABILITY to palm oil mills by 2022 90%TRACEABILITY to oil palm plantations across our global operations by 2023 100%RESPONSE RATE to all grievances raised via Wilmars grievance mechanism ACHIEVED 98.7%*TRACEABILITY TO MILLS which translates to 26.5*MILLION MT of products traceable to mill level ACHIEVED 83.4%*TRACEABILITY TO PLANTATIONS which translates to 22.4*MILLION MT of products traceable to plantation level ACHIEVED A 100%RESPONSE RATE consistently since 2015.85*grievance cases raised as of December 2022;78*cases closed while 7*are in progress 100%TRACEABILITY to palm oil mills by 2024(revised)90%TRACEABILITY to oil palm plantations across our global operations by 2023 and 100%by 2025 100%RESPONSE RATE to all grievances raised via Wilmars grievance mechanism 100%OF OIL PALM VOLUME sourced from ISPO,Malaysian Sustainable Palm Oil(MSPO)or RSPO certified sources by 2050 BUSINESS ETHICS AND COMPLIANCE DATA SECURITY AND PRIVACY CURRENT COMMITMENTS/TARGETSMAINTAIN NO SUBSTANTIATED COMPLAINTS concerning breaches of customer privacy and losses of customer data(ongoing)*CU has conducted limited assurance procedures on these figures.*CU has conducted limited assurance procedures on these figures.23Sustainability Report 2022|Wilmar International Limited22Sustainability Report 2022|Wilmar International LimitedABOUT WILMAROVERVIEW OF WILMAR 2-1,2-6Wilmar International Limited,founded in 1991 and headquartered in Singapore,is today Asias leading agribusiness group.Wilmar is ranked amongst the largest listed companies by market capitalisation on the Singapore Exchange.At the core of Wilmars strategy is an integrated agribusiness model that encompasses the entire value chain of the agricultural commodity business,from cultivation and milling of palm oil and sugarcane,to processing,branding and distribution of a wide range of edible food products in consumer,medium and bulk packaging,animal feeds and industrial agri-products such as oleochemicals and biodiesel.Our diverse global portfolio of consumer products includes edible oils,rice,wheat flour,noodles,sauces,condiments,margarine,sugar and plant-based protein.Information on our consumer products and brands can be found on our corporate website.THE SCALE OF OUR OPERATIONS 2-1,2-6,FB-PF-000.B,FB-AG-000.B Through scale,integration and the logistical advantages of its business model,Wilmar is able to extract margins at every step of the value chain,thereby reaping operational synergies and cost efficiencies.For more information about Wilmars activities,countries and regions of operation,value chain and business relationships,please refer to our Annual Report 2022 and corporate website.OVERVIEW OF OUR VALUE CHAIN TRADING,MERCHANDISING,&DISTRIBUTIONORIGINATIONCUSTOMERRaw&refined sugarBulk edible oilsConsumer pack edible oilsOilseed mealRice&flourOleo-chemicalsNoodlesSnacksBakery&dairy productsPlant-based proteinSauces&condimentsBiodieselSpecialty fatsPROCESSINGare part of our extensive distribution network.MANUFACTURING PLANTS IN 34 COUNTRIES AND REGIONS1,0001INDIVIDUALS GLOBALLY FORMED OUR MULTINATIONAL WORKFORCEABOUT100,00050NET PROFITUS$2.40B(FY2022)COUNTRIES AND REGIONS INCLUDING CHINA,INDIA AND INDONESIAREVENUEUS$73.40B1 Includes subsidiaries,joint ventures and associates24Sustainability Report 2022|Wilmar International LimitedAs a global integrated agriculture and food company,we see embedding sustainability into our operations as crucial to securing the future of the Group and for creating shared values for our consumers,shareholders and stakeholders.We strive to leverage our resources and expertise to drive positive impacts wherever we operate.Our commitment to sustainability has never been more important.2022 saw record-high inflation and increasing cost of living,alongside growing impacts of climate change.The current economic outlook is presenting unprecedented challenges to sustainable development globally.We review how the changing external context we are operating in shapes the material ESG topics for our business and stakeholders annually.As a result,we are continuously updating our policies and management of sustainability to ensure that our strategy and approach remain relevant to our stakeholders and resilient to evolving risks and opportunities.OUR APPROACH TO SUSTAINABILITY2-23 In 2022,we made progress across these four areas on several fronts,which are detailed throughout this Report.One key focus for us on the environmental front has been taking action on climate change.In October 2022,we signed up to the SBTi to cement our emission reduction targets and commitment made at COP26 to develop a sectoral roadmap for enhanced supply chain action consistent with a 1.5-degree Celsius pathway.To support these commitments,we are developing timebound strategies to achieve our near-term and net-zero emission reduction targets.These efforts include assessing our Scope 3 emissions and formulating comprehensive plans to address and reduce them.Please see page 56 for more details on our Scope 3 disclosures.Our No Deforestation,No Peat,No Exploitation(NDPE)Policy remains a crucial foundation and the blueprint for ensuring sustainable practices across our palm operations and supply chain.We have also extended this approach across our sugar business with the launch of a dedicated NDPE Sugar Policy in 2021 and NDPE Sugar Initiative in 2022 for our supply chain.For more on our policies and frameworks,please see our Sustainability Dashboard.Jujuhan River,IndonesiaCLICK HERE TO VIEW OURAND HERE TO VIEWNDPE POLICYNDPE SUGAR POLICYOUR OVERALL SUSTAINABILITY AGENDA REMAINS FOCUSED ON FOUR KEY AREAS:PROTECTING THE ENVIRONMENTLOOKING AFTER PEOPLE AND COMMUNITIESDELIVERING PRODUCT EXCELLENCETRANSFORMING OUR SUPPLY CHAINiPlease see page 200 for more on our materiality assessment processi2527Sustainability Report 2022|Wilmar International Limited26Sustainability Report 2022|Wilmar International LimitedStakeholders have been identified as those on whom our operations have a significant impact;those with vested interest in our sustainability performance;and those in public positions who influence our activities.Our stakeholders include:GOVERNMENTSEMPLOYEESCUSTOMERSSHAREHOLDERS AND THE INVESTING PUBLICLOCAL COMMUNITIESCIVIL SOCIETY ORGANISATIONS(CSOs)FINANCIAL INSTITUTIONSSUPPLIERSSMALLHOLDERSCERTIFICATION BODIES INDUSTRY BODIESSUSTAINABILITY PARTNERS AND COLLABORATORS PARTNERSHIPS AND MULTI-STAKEHOLDER INITIATIVES Given the complexity of the sustainability challenges facing society,collaborating with stakeholders from across different sectors and along value chains is vital.Multi-stakeholder initiatives provide us with a platform and an opportunity to exercise our leadership,participation and contribution to developing or revising industry-level or topic-specific standards.WE ARE AN ACTIVE CONTRIBUTING MEMBER OF THE ROUNDTABLE ON SUSTAINABLE PALM OIL(RSPO)SINCE ITS FORMATION IN 2004.Over the years,we participated in various RSPO working groups and have representation within:WE ARE ALSO MEMBERS OF OTHER INITIATIVES:Through our consumer product businesses,Sugar Australia and Goodman Fielder,we are also part of:STAKEHOLDER ENGAGEMENT Stakeholder engagement is integral to ensuring that we are able to understand and manage our impacts as a business.We value and proactively engage with stakeholders to gather constructive input.We seek meaningful engagement with stakeholders through a two-way process where they are given a clear avenue to question or raise concerns on Wilmar or our suppliers and we have the opportunity to proactively share with them our progress and updates.We also established a Grievance Procedure where stakeholders can raise any sustainability-related grievances through a rigorous and transparent resolution process.Further details on our Grievance Procedure can be found in the Responsible Sourcing and Supply Chain Transformation section and our Palm NDPE Implementation Annual Report 2022.2-28,2-29Stakeholder engagement is integral to ensuring that we are able to understand and manage our impacts as a business.RSPO Board of GovernorsEuropean Palm Oil Alliance(EPOA)Sabah Jurisdictional Certification Steering Committee Tropical Forest Alliance(TFA)Pongo Alliance Biodiversity and High Conservation Values Working GroupUnited National Global Compact(UNGC)Business for Social Responsibility(BSR)Round Table on Responsible Soy(RTRS)REDcycle scheme in AustraliaSoft Plastic Recycling Scheme in New Zealand BonsucroHuman Rights Working Group (which includes the Labour and Free,Prior,and Informed Consent(FPIC)sub-groups)Shared Responsibility Working GroupCompensation Task Force 2(CTF 2)Supply Chain Traceability Working GroupGreenhouse Gas Working Group 2Living Wage Task ForceRSPO Standard Revision 2022-2023 Task ForceRSPO Oleo Task ForceFor more information on our engagements with stakeholders,key issues or concerns raised and our response,refer to theiSTAKEHOLDER ENGAGEMENTsection of our Sustainability DashboardOur stakeholders2629Sustainability Report 2022|Wilmar International Limited28Sustainability Report 2022|Wilmar International LimitedEXTERNAL ASSESSMENTS AND RATINGS SUSTAINABILITY GOVERNANCE External assessments and ratings are important to us as they help to benchmark our performance,identify potential gaps in our approach,and hold us accountable to our stakeholders.They also play a role in acknowledging our positive efforts,which further encourages us as it assures that we are on the right path.Wilmars approach to sustainability is overseen by the Chairman and CEO,and the Board of Directors.They are supported by the BSC which works to formulate ESG strategies,identify ESG-related risks,evaluate ESG performance and targets and monitor the implementation of ESG-related policies and practices.The material topics and impacts identified through the stakeholder engagement process and materiality assessment were considered and approved by the Board.To ensure effective implementation of sustainability throughout the Group and that critical concerns are communicated to leadership,the BSC meets quarterly to review sustainability matters,and also receives periodic reporting and advisories from the Sustainability Management Team(SMT)with support from the Independent Sustainability Advisory Panel(ISAP).Sustainability risks and concerns are raised at each BSC meeting.These risks and concerns can range from standard operational matters to critical concerns where“critical concerns”are defined as risks that have potential immediate and catastrophic impact to our business,operations and people.Issues of critical concern are disclosed in our Annual Reports Risk Management section on page 60.Carbon Disclosure Project(CDP)Corporate Human Rights Benchmark(CHRB)Dow Jones Sustainability Indices(DJSI)Food and Agriculture Benchmark FTSE4Good Indices Global Child Forum KnowTheChain Benchmark Morgan Stanley Capital International(MSCI)Sustainalytics The Sustainable Policy Transparency Toolkit(SPOTT)by the Zoological Society of London(ZSL)2-9,2-12,2-13,2-14,2-16 SUSTAINABILITY MANAGEMENT TEAM(SMT)SMT is headed by the Chief Sustainability Officer and assisted by the General Manager Group Sustainability.The SMT is supported by the Sustainability Department and comprises members across all internal Wilmar departments and operational units.INDEPENDENT SUSTAINABILITY ADVISORY PANEL(ISAP)ISAP comprises independent sustainability experts and eminent individuals.The ISAP works with our SMT to provide on-the-ground support to execute and evaluate the implementation of our ESG policies.The ISAP provides advisories and recommendations related to external stakeholder expectations and global sustainability trends.We held our first in-person sustainability event since the outbreak of COVID-19,which was well-received by over 80 bankers,portfolio managers and analysts In 2022,we are pleased to have retained our presence in the DJSI World Index,with a score of 75 out of 100 an improvement from 70 in 2021 which puts the Group at the 94th percentile of all Food Products companies reviewed.This recognition marks Wilmars second consecutive year on the DJSI World Index and third straight year on the DJSI Asia Pacific Index.We retained our position in the semi-annual review of the FTSE4Good Index Series with further improved ratings.Wilmars ESG rating improved to 3.8 out of 5.0,with an increased percentile rank of 86%in the latest June 2022 review,from a rating of 3.7 and a percentile rank of 84%in December 2021.Wilmar performed well above the average score for all evaluation topics in the Governance pillar,in addition to performing above average for the Environmental and Social pillars.Wilmar was ranked first out of 100 palm oil producers,processors and traders for a second consecutive year with an improved total score of 93.2%in the 2022 assessment by the Sustainable Palm Oil Transparency Toolkit(SPOTT).Wilmar continues to rank top as the best performing company in the Global Child Forums Food,Beverage and Personal Care Benchmark.This year,we scored a perfect 10 for our efforts in safeguarding childrens rights and well-being,which was an increase from our previous score of 9.8.These achievements are a strong affirmation that we are making good progress in our sustainability journey,as we work towards driving positive impact for all.IN GLOBAL CHILD FORUMSIN SPOTTRETAINED POSITION IN FTSE4GOOD INDEX SERIESTOPRANK#1RANKFood,Beverage and Personal Care Benchmarkwith further improved ratingsAPPRECIATIONSDJSI WORLD INDEXRetained inclusion in31Sustainability Report 2022|Wilmar International Limited30Sustainability Report 2022|Wilmar International LimitedWilmars Sustainability Department is led by the Chief Sustainability Officer,with the General Manager Group Sustainability in charge of day-to-day management.Staffed by over 70 employees across our global offices and sites,the Sustainability Department works in collaboration with all business and operational units to implement the Groups multi-faceted sustainability strategies and initiatives.A combination of local and technical expertise throughout Asia,Africa and Europe enables the department to oversee implementation of the NDPE Policy and other sustainability related policies,sustainability certification,supply chain monitoring,R&D,carbon and climate change,stakeholder engagement and reporting.BOARD SUSTAINABILITY COMMITTEEBOARD OF DIRECTORSSUSTAINABILITY MANAGEMENT TEAMWILMAR BUSINESS UNITSHEADED BY CHIEF SUSTAINABILITY OFFICER,ASSISTED BY GENERAL MANAGER -GROUP SUSTAINABILITYINDEPENDENT SUSTAINABILITY ADVISORY PANELWildlife monitoring along the riparian area of our Sabahmas Plantation in SabahFor more information on the composition,independence,tenure of the Board,please refer to pages 48-55 and 70-71 of ourANNUAL REPORT 2022 iIn the Groups continuous efforts to create sustainable value for stakeholders,the Group has taken into consideration relevant key ESG targets in the annual performance review of its Executive Directors and key management personnel.The key ESG targets which were incorporated in the performance review for FY2022 include Climate Change,Responsible Sourcing and Supply Chain Transformation,Employee Health,Safety and Well-being,Business Ethics and Compliance as well as Talent Retention.These ESG targets form part of a larger set of ESG topics that have been identified as being material to the Group.FINANCE&ACCOUNTSINVESTOR RELATIONSINTERNAL AUDITTRADINGRESEARCH&DEVELOPMENTOPERATIONSENVIRONMENT,HEALTH&SAFETYHUMAN RESOURCESLEGAL&CORPORATE SECRETARIALCOMMUNITY DEVELOPMENTiFor more detail,please see pages 76-77 of our Annual Reports Corporate Governance section.KEY ESG TARGETSWilmars sustainability and ESG governance structureBIODIVERSITY AND CONSERVATIONSUSTAINABLE PACKAGINGENVIRONMENTAL FOOTPRINT OF OPERATIONSCLIMATE CHANGEPROTECTING THE ENVIRONMENTIS FROM RENEWABLE SOURCESPLASTIC CONSUMPTION REDUCTIONREDUCTION IN WATER CONSUMED COMPARED TO 2021OF TOTAL WASTE GENERATED WAS DIVERTED FROM DISPOSALOF GOODMAN FIELDERS PACKAGING IS RECYCLABLE OR REUSABLE,57,866,049 MWH 3,318 MT53a0,138LAUNCHED PALM OIL SECTORAL ROADMAPSIGNED UP TO THE SBTiTREESFROM 89 SPECIES HAVE BEEN PLANTED SINCE 2020in spaces outside our designated riparian and conservation areas in MalaysiaDURING COP27 MEETINGWITH COMMITMENTS TO SETTING NEAR-TERM AND NET-ZERO EMISSION REDUCTION TARGETSCO2to accelerate action within our supply chain in line with the 1.5 Celsius pathway and emissions reduction from our value chain6,419 MTREDUCTION OF PACKAGING WASTE THROUGH YKAmore than 40%of the 2025 targetexceeding the yearly target of 3,000 MT23SIAMANGS(GIBBONS)LIVE IN OUR SUMATRA CONSERVATION AREAtotal energy consumed in 2022,of whichINCREASE IN THE TOTAL INSTALLED CAPACITY OF PV PLANTS IN CHINA60MWPon track to achieve 100%by 202533,378HATOTAL CONSERVATION AREA IN WILMARS OIL PALM AND SUGARCANE PLANTATIONSCOP27PALMOILSECTORALROADMAP323335Sustainability Report 2022|Wilmar International Limited34Sustainability Report 2022|Wilmar International LimitedIndonesia and Malaysia are home to some of the worlds richest biodiversity.They are also the two primary locations for our palm upstream operations.That is why we channel significant resources towards protecting and restoring HCS forests and HCV areas,together with other ecologically and culturally important lands and ensuring that our supply chain is deforestation-free.BIODIVERSITY ANDCONSERVATION3-3,304-1,304-2,304-3,304-435Sustainability Report 2022|Wilmar International LimitedWilmar is committed to biodiversity conservation in our operations and our supply chain,which extends from our overarching NDPE Policy.This commitment is guided by two main objectives:To MANAGE,MAINTAIN AND SUSTAIN biodiversity and ecological functions existing within conservation areas in Wilmar-owned operation areas and across the wider landscapes where we operate.To PROVIDE TECHNICAL GUIDANCE AND SUPPORT to our stakeholders,including our suppliers,enabling the mainstreaming of biodiversity conservation in the plantation landscape.0102OUR TARGETS2022 PERFORMANCE NO DEFORESTATION No development on HCS forests or HCV areas No burning in the preparation of new planting,re-planting of any other development NO NEW DEVELOPMENT ON PEATLAND regardless of depth MAINTAIN BEST MANAGEMENT PRACTICES for existing plantations on peat ZERO DEFORESTATION AND ZERO NEW DEVELOPMENT ON PEATLAND in Wilmars landbank SAFEGUARD BIODIVERSITY in Wilmars operational areas 32,544 HA OF HCV AREAS AND HCS FORESTS SET ASIDE for conservation area in our oil palm plantations in Indonesia,Malaysia,Ghana and Nigeria(about 10%of our total landbank).This includes 97 HA added to our conservation area in 2022,mainly from our Sabah plantations 834 HA of additional conservation area at our sugarcane plantations and mills in Australia and India RESTORE AND REHABILITATE 120 HA of degraded forest and planted area to improve the connectivity of Sekar Imej Conservation Area(SICA)Project RENEWED PARTNERSHIP WITH THE SOUTH EAST ASIAN RAINFOREST RESEARCH PARTNERSHIP(SEARPP)in 2022 for a five-year term,which focuses on Wilmars NDPE commitments to develop research-led programmes for the restoration and rehabilitation of forests and habitats FIRST SCIENTIFIC EXPEDITION to SICA Project aimed at studying and documenting the flora and fauna,assessing forest quality and estimating carbon stocks PLANTED OVER 30,000 TREES FROM 89 SPECIES in areas beyond our Malaysian operations designated conservation and riparian areas through the Conservation Recreational Landscape Project(CRLP)since its initiation PROTECT RARE,THREATENED AND ENDANGERED(RTE)SPECIES of wildlife for long-term viability of the species REINTRODUCED 23 SIAMANGS(Symphalangus syndactylus)into the wild through the Siamang Reintroduction Programme PUBLISH BEST MANAGEMENT PRACTICES GUIDELINES ON CONSERVATION for Indonesia,Malaysia and West Africa by 2024 PUBLISH EDUCATIONAL SERIES AND MATERIALS to promote biodiversity conservation in the plantation landscape PUBLISHED:Best Management Practices Manual for Growers on Forest Conservation and Community Collaboration in Bahasa Indonesia and English A Practical Guidance to Conservation Area Monitoring in Bahasa Melayu and Bahasa Indonesia Newletter series for conservation efforts in Wilmars operational area in Malaysia 343437Sustainability Report 2022|Wilmar International Limited36Sustainability Report 2022|Wilmar International LimitedOUR CONSERVATION AND BIODIVERSITY MANAGEMENT ARE GUIDED BY FIVE KEY STRATEGIES:These strategies are delivered through the programmes discussed in further detail below.SAFEGUARDING BIODIVERSITY BUILDING ECOSYSTEM RESILIENCE ENGAGEMENT AND CAPACITY BUILDING SMART PARTNERSHIPS COLLABORATIONS AND EFFECTIVE MANAGEMENTIDENTIFYING AND CONSERVING HCS FOREST AND HCV AREAS Since introducing the NDPE Policy in 2013,we have upheld our commitment towards“No development on HCS forests or HCV areas”.We extended this commitment to our sugar operations with our NDPE Sugar Policy launched in 2021 which sets out similar commitments to prohibit the conversion of legally protected areas or HCV areas and preserve and enhance biodiversity and ecosystem services.The NDPE Policy requires all new oil palm land developments by Wilmar or our suppliers to identify HCV areas and HCS forests for protection using international best practices guidance from the:RSPO Principles and Criteria(P&C)High Conservation Value Resource Network(HCVRN)High Carbon Stock(HCS)Approach We have identified a number of wildlife species within our conservation areas,including birds and mammals from the IUCN Red List of Threatened Species.Consequently,all HCS forests and HCV areas identified within our palm oil operations to date are monitored and managed as conservation areas.To date,a total of 32,544 ha in Wilmars oil palm plantations are conservation areas.This includes 97 ha added to our conservation areas in 2022,mainly from our Sabah plantations.We also strive to promote mainstream biodiversity conservation across the plantation landscape and published“A Practical Guide to Conservation Area Monitoring”to support our suppliers in establishing monitoring systems to manage identified conservation areas.TOTAL CONSERVATION AREA IN WILMARS SUGARCANE PLANTATIONSHA834HATOTAL CONSERVATION AREA IN WILMARS OIL PALM PLANTATIONS32,544CONSERVATION AREAS IN OUR PALM OPERATIONSINDIA159NIGERIA3,953SUMATRA,INDONESIA2,988GHANA83AUSTRALIA675SABAH,MALAYSIA6,775Conservation area(ha)by regionTOTAL33,378 haRiparian zones18.3%6,104 haConservation area by typeHCV(Excluding riparian zones)79.1&,418 haOther conservation areas2.54 haHCS0.1 haWEST KALIMANTAN,INDONESIA1,930SARAWAK,MALAYSIA1,725CENTRAL KALIMANTAN,INDONESIA15,09039Sustainability Report 2022|Wilmar International Limited38Sustainability Report 2022|Wilmar International LimitedCONSERVATION AREAS IN OUR SUGAR OPERATIONS We require all sugarcane plantation development activities to demonstrate that they do not involve HCV areas or areas that are internationally or nationally legally protected.Where protected areas and areas of ecological importance have not yet been identified,we encourage plantation owners to identify biodiversity resources and ecosystem services that may be impacted by their operations.As of December 2022,Wilmar has 834 ha of conservation areas in our sugarcane plantations.In Australia,we have identified and are conserving 675 ha of endangered and of concern vegetation.In India,we have planted close to 15,500 trees at the periphery of our mills and plants.Since starting this initiative in 2007 at Athani mill,we have increased the total number of trees planted to more than 135,000 trees and covering 159 ha across our India operations.Recognising the important role played by our workers,as well as local and indigenous communities,we have also developed a range of programmes to raise awareness and build capacity to further strengthen our ongoing conservation efforts.CONSERVATION MONITORING In addition to SMART,we also collate details about our HCV management programmes,including restoration,signboard installations,marking poles,boreholes and socialisation efforts,on our internal HCV Management Implementation Dashboard.Through this dashboard,we can easily quantify the progress and success of our management plans for each plantation and identify areas for improvement.Photo of sun bears(Helarctos malayanus)captured by a camera trap set up in Wilmars HCV areaSince adopting this system in 2015,we have logged more than 13,221 PATROLS,27,728 FIELD PHOTOS and 14,795 DIRECT AND INDIRECT2 wildlife sightings where 6,411 LOGS WERE OF RTE SPECIES.2Indirect wildlife sightings include images from camera traps and spotting of footprints,among others Wilmar has used the Spatial Monitoring and Reporting Tool(SMART)since 2013 to monitor and patrol our protected landscapes as well as for data analysis.SMART provides four main data retrieval components,including:The data is used to help identify HCV areas and encroachment in our plantations as well as evaluate and adapt our management and monitoring plan for conservation activities in Indonesia using five key steps:LOCATION SPATIAL DATADATE AND TIME OF PATROLOBSERVATION DATA OF WILDLIFE IN HCV AREASHUMAN ACTIVITIES IN HCV AREASsuch as encroachment and illegal logging number of patrols that were conducted by our field team field photos taken during patrols findings from each patrolCollecting the following data from our field team:Inputting data into the systemReporting and evaluation with plantation managementData processing and mappingDevelop plans to manage HCV areas based on the findingsSTEP 1STEP 2STEP 4STEP 3STEP 540Sustainability Report 2022|Wilmar International LimitedWe work with local communities,civil society organisations,government departments and suppliers to ensure the effective management and conservation of Wilmars operations and the surrounding landscapes.More information on our conservation activities is available on our Sustainability Dashboard.CONSERVATION STORIES SICA is the largest conservation area in Wilmars operations in Malaysia,spanning a total of 2,469 ha in the interiors of the Beluran District in Sabah.Located within our plantations concession boundary,the SICA project is an ongoing joint effort between Wilmar and our stakeholders,including the surrounding local communities,to protect and preserve the largely lowland mixed-dipterocarp forest.The key components include biodiversity conservation,capacity building and community-based conservation approach.The initiative aims to develop SICA as a Biodiversity and Carbon Research Centre by 2030.SEKAR IMEJ CONSERVATION AREA(SICA)PROJECT MALAYSIAInitiated by our Plantation Head of Malaysia,Mr Gurcharan Singh Sardar,the Conservation Recreational Landscape Project seeks to plant trees in spaces outside our designated riparian and conservation areas in Malaysia.This is one of the commitments we have made in our NDPE Policy to promote the“Go Green”approach.Teams from all our operating units,both plantations and mills,are involved in reforestation and greening projects around the housing complexes,vacant spaces and palm oil mills.Since 2020,a total of 30,138 trees from 89 species have been planted in both Sabah and Sarawak.We are also working closely with government agencies such as Sabah Forest Department and Sarawak Forest Department to support the Greening Malaysia Programme and 100 Million Tree-Planting Campaign.CONSERVATION RECREATIONAL LANDSCAPE PROJECT(CRLP)CASE STUDYTo continue promoting best management practices in the plantation landscape.Key focus areas of the MoU include:establishing research platforms to support scientific projects and experimental study plots relating to best management practices(BMP)of plantation and conservation areas exploring the establishment of research-led programmes for forest and habitat restoration and rehabilitation.Initial observations indicated forest quality to be in good condition.SEARPP concluded that SICA fulfils the basic criteria of the OECM survey and presented the findings to the Ministry of Energy and Natural Resources.The expedition,which involved scientists and researchers from SEARRP,Universiti Sains Malaysia and Universiti Malaysia Sabah as well as field guides from the local communities,aimed at studying and documenting the flora and fauna in the area as well as assessing forest quality and estimating carbon stocks in order to determine biodiversity and carbon baselines.The data will underpin and form recommendations for future research to support SICAs management and restoration plans for the area.01SOUTH EAST ASIA RAINFOREST RESEARCH PARTNERSHIP(SEARPP)AND WILMAR SIGNED A MEMORANDUM OF UNDERSTANDING(MoU)THE SEARPP TEAM CONDUCTED A PRELIMINARY ASSESSMENT OF OTHER EFFECTIVE AREA-BASED CONSERVATION MEASURES(OECM)IN SICA USING THE FOREST INTEGRITY ASSESSMENT TOOLTO CULTIVATE INTEREST IN FOREST PROTECTION,WE CONDUCTED A SERIES OF ENGAGEMENT AND AWARENESS TALKS WITH MORE THAN 290 VILLAGERS FROM KAMPUNG MONONOD AND KAMPUNG KAIBOTON INCLUDING VILLAGE HEADS AND SCHOOLCHILDRENBLOCKCHAIN TECHNOLOGY TO AID CONSERVATION MONITORINGLAUNCHED THE JUNIOR RANGER AND WILDLIFE AWARENESS OUTREACH PROGRAMME(WAOP)WILMAR PARTNERED WITH SEARPP TO CARRY OUT THE FIRST SCIENTIFIC EXPEDITION TO SICA0203As part of these engagements,we raised awareness of the importance of forests and wildlife as well as introduced the SICA Project to local communities.04In collaboration with the Sabah Wildlife Department,SK Matanggal and Sekar Imej Estate,we launched the Junior Ranger and Wildlife Awareness Outreach Programme(WAOP).The programme aimed to promote conservation and create awareness of wildlife protection by encouraging local communities to participate.Activities conducted included talks on the importance of the forest to the community,wildlife quizzes as well as colouring and drawing competitions.A total of 137 children,7 teachers and 22 locals participated in the programme.06We began field testing the use of blockchain technology to aid conservation monitoring efforts in SICA.Following pilot tests of the BanQu system to monitor and record data,we fully implemented the system for use by our forest patrol teams.05Key highlights of activities in 2022(SICA Project):414043Sustainability Report 2022|Wilmar International Limited42Sustainability Report 2022|Wilmar International LimitedAFRICACASE STUDYBetween February and September 2022,PT KSI released six siamangs,also known as gibbons(Symphalangus syndactylus),into its conservation area.Siamangs are known to be difficult to reintroduce to the wild.Widespread deforestation means that siamangs are increasingly susceptible to loss of habitat and food as well as illegal poaching.As such,Wilmar spends a considerable amount of effort to ensure the successful reintroduction of siamangs into the wild.This includes conducting extensive surveys and post-release monitoring.Patrol reports by our conservation team and members of the NGO,Kalaweit Indonesia Foundation,have shown that all siamangs are in good health and have successfully reproduced within our conservation area.Thanks in part to the collaboration and participation of our stakeholders,including the Nagari Talao and Nagari Sei Kunyit communities,the Natural Resources Conservation Agency,and the Kalaweit Indonesia Foundation,in December 2022,a new siamang was born from one of the pairs that was released,increasing the total siamang population in the conservation area to 23 individuals.In 2019,we unfortunately lost one of our adult female siamang(Sharon Gy)due to injuries from a bee attack in the forest.The remaining siamangs are in good health so far.African grey parrots,commonly called African greys,are native to rainforests of West and Central Africa which overlap oil palm production regions.Surveys at our operations in Ghana and Nigeria,Biase Plantations Limited and Eyop Industries Limited,have shown the continued presence of this species within our plantation areas despite it being extremely rare to find African greys in the wider neighbouring landscape.To model how oil palm plantation expansion would impact the habitats of African greys and develop parrot friendly practices in oil palm plantations,Biase Plantations Limited and Eyop Industries Limited are working with researchers from the Department of Zoology and Environmental Biology and University of Nigeria Nsukka to understand the activities of the parrot species in the area.Early results show that the restrictions on hunting within the plantations have played a significant role in the continued presence of African greys and other large frugivorous birds including threatened turacos and hornbills.The results from these surveys will help us develop tools to enhance African grey conservation within oil palm plantations in the region.RELEASE OF SIAMANGS IN PT KENCANA SAWIT INDONESIA(KSI)THE AFRICAN GREY PARROT MONITORINGINDONESIAThe presence of Sumatran clouded leopards(Neofelis diardi diardi)was recently observed in PT Kencana Sawit Indonesia-Solok Selatan(KSI-Solok Selatan)in West Sumatra.The Sumatran clouded leopard is considered an endangered and endemic species in Sumatra.These sightings indicate that monitoring and conservation efforts in the area have been effective in preserving its ecology.SUMATRAN CLOUDED LEOPARD SIGHTING CASE STUDYNAME OF SIAMANGSEXDATE OF BIRTH NAME OF PARENTS1.SHARON GYFemaleApril 2017Kenzu and Sonya2.KINO JUNIORMaleAug 2018 Jeff and Poly 3.JAKAMaleAug 2018 Rizal and Rika 4.CORONA/NANDO MaleOct 2020 Rizal and Rika 5.HEPPYFemaleAug 2020 Cimut and Sonya 6.ARDIMaleOct 2021 Bolu and Item 7.NEWLY BORN(YET TO BE NAMED)MaleDec 2022 Juno and Meri A Siamang(Symphalangus syndactylus)after it was released to the wild in Central KalimantanAs part of our efforts to increase awareness and knowledge on conservation,we are developing a forest education eco-trail in our Central Kalimantan project concession(PT Mentaya Sawit Mas and PT Karunia Kencana Permaisejati).The 850 meter-long eco-trail is fitted with signboards and posters containing information about species and habitat conservation.Since opening in August 2022,a total of 426 students from seven schools have participated in the programme which includes activities such as the identification of flora and fauna,forest ecosystem,waste management,fires and tree planting.FOREST EDUCATION IN CENTRAL KALIMANTAN Siamangs that were born in the PT KSI conservation area iLEGENDEXTANT(RESIDENT)EXTANT&INTRODUCED(RESIDENT)POSSIBLY EXTINCTEXTINCT4243424345Sustainability Report 2022|Wilmar International Limited44Sustainability Report 2022|Wilmar International LimitedPEATLANDSPeatlands play an important role in climate change.They store more carbon than all other soil types in the world combined but are highly prone to catching fire if drained or faced with dry conditions.Since launching our NDPE Policy,Wilmar has prohibited any new development on peat regardless of depth.Where feasible,we work with experts and communities to explore options for peatland restoration.Approximately 1,706 ha#,which is about 1%of the total planted area in our palm plantations across Indonesia and Malaysia,is classified as peat.To minimise peat subsidence and the release of carbon dioxide in these planted areas,we apply the BMP defined by peat experts and the RSPO.This includes putting measures in place to ensure water tables remain at optimal levels.We encourage our suppliers to implement similar measures and published the“Best Management Practices Manual for Growers on Forest Conservation and Community Collaboration”to support them in managing conservation areas,including peatlands,in their estates.We also have 0.74 ha of peatlands in our conservation areas,located within our operations in Sumatra,Indonesia.In these areas,we participate and contribute towards peatland conservation targets and efforts under supervision and support by the Ministry of Environment and Forestry,as well as deforestation-free supply chain initiatives and knowledge-sharing platforms by the Tropical Forest Alliance.Awareness programme for school children at Wilmars conservation site in Central KalimantanPLANTED PEAT AREACONSERVED PEAT AREASUMATRA1,593#0.74SARAWAK88#0SABAH10#0WEST KALIMANTAN15#0#EY has performed limited assurance procedures on these figures.Conserved and planted peat area by region(ha)45Sustainability Report 2022|Wilmar International Limited44Sustainability Report 2022|Wilmar International Limited47Sustainability Report 2022|Wilmar International Limited46Sustainability Report 2022|Wilmar International LimitedAs the global demand for vegetable oil continues to grow,so do concerns about deforestation.As the most efficient oil crop in terms of land use3,we believe that palm oil has the greatest potential to meet this demand.Through ongoing efforts to improve our yield and extraction rate,we are continuously exploring opportunities to increase our palm oil production without expanding or developing new land areas.For more information on our R&D,please refer to the section on Innovation and Technology.FIRE AND HAZE MONITORING,DETECTION AND SUPPRESSION Wilmar adheres to a strict zero-burn policy.We deploy mechanical methods for land development and preparation.The method enables us to leave woody debris to decompose and subsequently feed the land with nutrients,reducing our reliance on inorganic fertilisers and decreasing our greenhouse gas(GHG)emissions.This policy also applies to our third-party suppliers.Wilmar has implemented a 24/7 fire monitoring system to alert us of fires in and around our concessions as well as protocols to prevent,monitor,suppress and report fires in all of our operating units globally.We supplement our monitoring efforts with community education,awareness campaigns and multi-stakeholder partnerships to entrench sustainable practices throughout the industry.We use satellite imagery to monitor fires within and up to five kilometres outside our boundaries.All hotspot notifications are verified on the ground as satellites may occasionally capture temperature fluctuations that are not necessarily fires.To improve the efficiency of our monitoring processes,we implemented an integrated fire monitoring platform to automatically capture and relay hotspot alerts to field managers.We supplement this platform with daily on-the-ground fire monitoring which has proven effective in detecting and suppressing fires even before detection by satellite.This monitoring platform supports our dashboard system which was developed in 2021 and is used to record,monitor and report the implementation of the fire monitoring.Initially deployed for use mainly in Indonesia where fire incidents are most prevalent,we have since expanded this monitoring programme to Malaysia,Ghana and Nigeria.We also work closely with the RSPO in sharing fire-related data and verifying hotspot notifications through the RSPO Hotspot Monitoring Programme.Our response teams are immediately dispatched to extinguish fires when there are confirmed incidences.We monitor fires within and surrounding all our palm operations to mitigate the risk of fires through prevention,early detection,quick suppression and reporting.We also monitor fires in our suppliers concessions via our Supplier Group Compliance Programme(SGCP).We immediately seek clarification upon receiving alerts from our monitoring platform through the media.For more information on SGCP and FFA,please refer to our Palm NDPE Implementation Annual Report 2022.YIELD AND EXTRACTION RATES CASE STUDYCONTROLLED BURNING IN BURDEKIN,AUSTRALIAIn the Burdekin region of Queensland,Australia,we use fire to remove leafy sugarcane which can obstruct waterflow and cause poor irrigation when harvested and left on the ground.We implement our robust fire standard operating procedures(SOPs)and ensure all applicable local laws and regulations are adhered to.In 2022,a total of 3,143 ha of plantations in our sugar operations were burnt using the controlled methods.AVERAGE RAINFALL(MM)TOTAL AFFECTED AREA(HA)NO.OF ACTUAL FIRESHOTSPOT DETECTEDACTUAL FIRESCentral KalimantanWest KalimantanSumatraTotal7407424277161Central KalimantanWest KalimantanSumatraTotal1814870211281.016116812,956423954641662771785150242,4903,4293,0773,297201820192020202120222,9569616,9623901,0091612,4903,4293,0773,29720182019202020212022981231921162143 https:/palmoilalliance.eu/facts-on-palm-oil/Hotspots vs actual fires in Wilmarsconcessions by region in Indonesia(no.)Fires in Wilmars concessions in IndonesiaHotspots vs actual fires within a five-kilometre radius outside of Wilmar concessions by region in Indonesia(no.)Fires within a five-kilometre radius outside of Wilmars concessions in Indonesia47Sustainability Report 2022|Wilmar International Limited49Sustainability Report 2022|Wilmar International Limited48Sustainability Report 2022|Wilmar International LimitedCLIMATE CHANGE 3-3,201-2,FB-AG-110A.2,FB-AG-440A.1 OUR TARGETS2022 PERFORMANCE As part of our JOINT STATEMENT PLEDGING OUR COMMITMENT TO A SECTORAL ROADMAP FOR ENHANCED SUPPLY CHAIN ACTION TO ALIGN WITH GLOBAL CLIMATE GOALS,we aimed to achieve the following:MAP THE GROUPS SCOPE 3 GHG EMISSIONS to form a complete inventory of our total GHG emissions for 2020,our baseline year DEVELOP COMPREHENSIVE TARGETS consistent with a 1.5-degree Celsius pathway and aligned with the SBTi.These targets will also be linked to our energy and water efficiency programmes To ensure ALL SUPPLIERS PALM OIL VOLUMES ARE IN THE DELIVERING CATEGORY OF THE NDPE IRF(Implementation Reporting Framework)by 2025 and the progress is reported annually COMPLETED THE MAPPING OF THE GROUPS SCOPE 3 GHG EMISSIONS for baseline year 2020 which will be used to identify the priority areas for us to focus on in our climate roadmap Please refer to the section on Responsible Sourcing and Supply Chain Transformation and the Palm NDPE Implementation Annual Report 2022 for our progress on supply chain traceability REDUCE OUR GHG EMISSIONS INTENSITY BY 15%for all of our palm oil mills in Indonesia,Malaysia,Ghana and Nigeria,regardless of RSPO certification status by 2023,against a 2016 baseline of 0.82 tCO2e per MT CPO The GHG emissions intensity in 2022 was 0.68 tCO2e PER MT CPO for our palm oil mills 49Sustainability Report 2022|Wilmar International LimitedOur focus on addressing climate change concerns has been in our upstream palm oil and sugar operations,where there is the most significant impact.As the world transitions to a low-carbon economy,we have expanded our mitigation efforts throughout our global business.We are in the process of developing comprehensive targets consistent with a 1.5-degree Celsius pathway and aligned with the SBTi.In addition to our efforts to reduce our impact on the climate,we look to build resilience for our business and key stakeholders by continuing to act proactively on the evolving risks and opportunities relevant to our business.To assess our climate-related risks and opportunities,we conducted a recent scenario analysis in 2022 based on a two-degree Celsius scenario over the short-term(two years),medium-term(two to 10 years)and long-term(more than 10 years).The results of this assessment are summarised in the table on the following page and are being used to inform management and leadership discussions to ensure Wilmars strategy and business model remains resilient,competitive and able to fulfil market expectations.CLIMATE-RELATED RISKS AND OPPORTUNITIES For more information on how we assess our climate-related risks and opportunities,SEE PAGE 214 IN OUR SUSTAINABILITY REPORT 2022i4851Sustainability Report 2022|Wilmar International Limited50Sustainability Report 2022|Wilmar International LimitedRISK TYPEACUTE CHRONIC OPPORTUNITY TYPEMARKETS ENERGY SOURCE PRODUCTS AND SERVICES APPLICABLE TIME FRAMESMEDIUM LONG APPLICABLE TIME FRAMESSHORT SHORT LONG DESCRIPTIONTemperature change and increased frequency of extreme weather events such as floods and droughts can increase the volatility of crop production and the spreading of new diseases and pests which can cause disruption to the wider ecosystem Increasing pressure on fertile soils which could lead to long-term damage to crops and impact the feasibility of continual planting of crops,which in turn poses risks to land use,food production and food security DESCRIPTIONAccess to new markets due to regulatory requirements for renewable energy to be part of the energy mix.An example would be using sustainable biofuel to replace existing fossil fuel Use of lower-emission sources of energy.Biogas,which has a high proportion of methane,can be utilised as a fuel source to replace diesel for electricity generation at minimal operational fuel cost Development of new products or services through R&D and innovation to meet growing consumer demand for reduced negative environmental and social footprint in products and services EXAMPLES OF POSSIBLE IMPACTSProductivity and yield Productivity and yield EXAMPLES OF POSSIBLE IMPACTSIncreased revenues through access to new and emerging markets Reduced indirect(operating)costs Increased revenues through access to new and emerging markets EXAMPLES OF MITIGATION ACTIONS Investing in the R&D of palm seedlings that are more resilient to extreme weather patterns Implementing sustainable agronomic practices,including the proper application of fertiliser and analysing the health of the soil for optimum growing conditions EXAMPLES OF ACTIONS TO REALISE OPPORTUNITYContinue to ensure supply to markets(e.g.European Union)are certified accordingly Look into the possibility of building methane capture plants at palm oil mills Continue to collaborate widely and invest in scientific research to innovate on new and improved products TRANSITION RISKSPHYSICAL RISKSRISK TYPECURRENT REGULATIONSEMERGING REGULATIONSTECHNOLOGY LEGALMARKETREPUTATIONAPPLICABLE TIME FRAMESSHORTSHORTLONGMEDIUM SHORTSHORTDESCRIPTIONAdhering to existing rules and regulations on emissions or climate change mitigation such as the Paris Agreement and regulations mandating the incorporation of methane capture systems by operators New regulations which restrict emissions or promote climate change adaptation such as carbon tax or Intended Nationally Determined Contributions(INDCs/NDCs)Disruptive new technologies such as alternatives for commodity productsLitigation claims such as failure to meet our customers climate-related terms in procurement contractsIncreasing consumer awareness on climate change and expectations to manage climate-related impacts.For example,consumer request on traceability and no deforestation for goodsReputational risk can lead to boycotts by stakeholders such as consumers,banks and investorsEXAMPLES OF POSSIBLE IMPACTSCost(investment required to meet requirements)Cost(investments required to meet requirements)and restriction in expansion of production landBusiness sustainabilityBusiness sustainabilityReduced supplier pool due to non-compliant suppliers and reduced demand for commodities not aligned to market expectationsDecreased demand and disrupted access to financing EXAMPLES OF MITIGATION ACTIONS Continuing to focus on finding and implementing initiatives to reduce our operational GHG emissions Continuing to focus on finding and implementing initiatives to reduce our operational GHG emissions Investing in R&D to stay abreast of technological developments and ensure our strategic plans can pivot to turn potential technology risks into opportunitiesCommitting to science-based targets and ensuring we put in place plans to meet our commitmentsWorking closely with our suppliers to implement our NPDE commitmentsClose monitoring of changes and continuing good performance in key sustainability ratings and rankings through transparent disclosureOPPORTUNITIESClimate change risks and opportunities505153Sustainability Report 2022|Wilmar International Limited52Sustainability Report 2022|Wilmar International LimitedCLIMATE CHANGE ADAPTATION CLIMATE CHANGE MITIGATION 305-5 The food and agriculture sectors are especially vulnerable to climate change.Increasingly extreme weather patterns,including prolonged droughts or periods of heavy rainfall,can negatively affect crop yields.We therefore invest heavily in the R&D of palm seedlings that are resilient to extreme weather patterns.These seedlings are also sold to smallholders and smaller plantation companies to ensure the reliability and resilience of our future supply.As customers increasingly favour and look for responsibly and sustainably produced commodities,we also actively invest in R&D to identify environmental-friendly solutions.Examples include developing plant-based protein to reduce our reliance on animal-based proteins and producing soaps and detergents using vegetable-based surfactants,which are more consumer and environmental-friendly.We are committed to progressively reducing GHG emissions from our operations while supporting global efforts to mitigate the impacts of climate change.All our business segments are focused on reducing GHG emissions through various initiatives.Wilmar signed up to the SBTi in October 2022 and committed to setting both near-term and net-zero emission targets.Over the next 18 months,we will develop timebound plans outlining our strategy and approach to achieve our targets.We have already established our Scope 1 and 2 baselines and implemented measures to reduce these emissions,primarily through investments in operational efficiency and renewable energy.In preparation to undergo the target setting assessment,we have externally verified our Scope 1 and 2 baseline.Having recently completed mapping our Group-level Scope 3 emissions for baseline 2020,the next phase of our commitment will be to develop comprehensive plans to address and reduce them.For more information on our R&D,please refer to the section onINNOVATION AND TECHNOLOGYiFor more information on reusing biomass,please refer to the section onENVIRONMENTAL FOOTPRINT OF OPERATIONSiPalm oil mill in IndonesiaWilmar signed up to the SBTi in October 2022 and committed to setting both near-term and net-zero emission targets.REDUCING GHG EMISSIONS IN OUR UPSTREAM PALM OIL OPERATIONS GHG emissions reduction in our palm oil business is primarily achieved by generating electricity from biomass,treating our palm oil mill effluent(POME),halting deforestation and employing best practices on cultivated peatland to reduce the carbon footprint of our palm oil operations.Methane capture is an important element of our strategy to reduce GHG emissions in our palm oil operations.The recovered biogas is used to generate energy while any excess is flared off to minimise leakage.To date,we have built 25 methane capture facilities in our Indonesia and Malaysia operations.With all methane capture plants in operation,we managed to avoid a total of 0.6 million tCO2e of GHG emissions in 2022.In addition to biogas,we generate electricity in our palm oil mills using biomass,including by-products from the milling process such as empty fruit bunches(EFB),palm kernel shells(PKS)and mesocarp fibre.55Sustainability Report 2022|Wilmar International Limited54Sustainability Report 2022|Wilmar International LimitedREDUCING GHG EMISSIONS IN OUR SUGAR OPERATIONS REDUCING GHG EMISSIONS IN OUR FACTORIES Our sugar operations in Australia and India make use of biomass to generate renewable electricity.Cane bagasse,a by-product of crushing sugarcane,is the main source of fuel powering our mills.We have adopted best management practices in fertiliser and chemical usage and ensure the efficient use of energy in our sugar operations.To date,we have deployed a number of energy and resource initiatives in our sugar plantations and refineries including reusing biomass and water where possible and employing efficient irrigation practices.For more information on these initiatives,see the Environmental Footprint of Operations section.In 2022,our sugar refineries have been developing an Energy and GHG Reduction Pathway towards a low-emissions future.This will guide our investments towards reducing our refineries footprints.Across our factory operations,we have continued to reduce our reliance on electricity from the grid and non-renewable sources.We continued to roll out rooftop solar installations at our remaining sites across Asia.To date,66.2 MWp of rooftop solar panels are already in operation with an additional 105.8 MWp currently under construction or planned to be rolled out across our global operations.Although the majority of our solar projects are currently in China,Indonesia and Malaysia contribute significantly to our overall Group emissions due to our scale of operations there and thus our focus in 2023 will be on rolling out the solar programme in these countries.Recognising that a large portion of our emissions come from coal,we seek opportunities to replace coal with less polluting fuels.Our China subsidiary,Yihai Kerry Arawana(YKA),has decommissioned several coal boilers and switched to natural gas and biogas collected via treatment of wastewater and sewage.In 2022,we collected a total of 11.16 million Nm3 biogas representing a total reduction of 8,558 MT of coal and 0.2 million tCO2e.In China,Indonesia and Vietnam,we reuse rice husk,a by-product from rice milling to generate electricity and steam.In 2022,we collected a total of 345,602 MT of rice husks and produced four million GJ of renewable energy.Our refinery in Kunming,China,is the first Wilmar site,as well as the first in the oil and grain industry in China,to be certified as carbon neutral.This achievement was verified by the China Environmental United Certification Center.In Australia and New Zealand,we also invest in purchasing renewable energy certificates(RECs)to offset our energy usage where electricity requirements are greater than our renewable energy generation potential.Since mid-2021,our Australian subsidiary,Goodman Fielder,has achieved 100%renewable electricity across its operations using RECs.While we are not currently regulated by a carbon pricing system,in the scenario where our sites have requirements to meet future compliance thresholds such as Chinas National Cap and Trade Programme,we will also look into purchasing carbon credits as a potential solution.Beyond the direct emissions benefits,we view renewable energy as a fundamental element of our broader net-zero ambition across our factories.We are thus exploring opportunities to move towards electrifying our operations to drive further emission reductions.In 2021,Goodman Fielder began running an electric truck trial and progressively replaced 22%of its leased sales vehicles with lower emission hybrid vehicles.As of 2022,we have replaced an additional 38%,representing a total of 139 vehicles across Australia and New Zealand,with hybrids.To further reduce For more information on how we protect forests and manage peatlands to mitigate climate change,see the section onBIODIVERSITY AND CONSERVATIONiWe are similarly committed to reducing climate impacts from our value chain and expect our suppliers to adopt climate change mitigation practices in line with our NDPE commitments.Following our pledge at COP26,we worked with several of our peers in the palm oil sector to develop a Palm Oil Sectoral Roadmap to aid in accelerating supply chain action and reducing emissions.In addition to our ongoing NDPE efforts,we will strive to engage with other industry players and advocate the recognition and adoption of this roadmap.Wilmars palm oil and sugar mills rely mostly on renewable energy that is generated from biomassOF ROOFTOP SOLAR PANELS IN OPERATIONTOTAL AMOUNT OF COLLECTED BIOGAS IN 2022MILLIONNM366.2 MWp11.16TOTAL AMOUNT OF PRODUCED RENEWABLE ENERGY FROM RICE HUSK IN 20224MILLION GJour transport emissions,Goodman Fielders New Zealand operations recently completed a Network Transformation Programme,reducing the distance travelled to deliver our products to customers.Since the implementation of the programme in 2019,we have reduced the number of delivery vehicles by 51 trucks and distance travelled by 898,081km.This corresponds to a 17crease in the number of trucks and a 32crease in distance travelled.Work is underway to further optimise our network routes.Goodman Fielders New Zealand operations have additionally developed roadmaps towards achieving net-zero emissions for its four largest sites under the Energy Efficiency and Conservation Authoritys Energy Transition Accelerator Programme.57Sustainability Report 2022|Wilmar International Limited56Sustainability Report 2022|Wilmar International LimitedOUR GHG EMISSIONS 305-1,305-2,305-3,305-4,305-5 Majority of our emissions come from our factories and upstream palm oil operations.In 2022,our total Scope 1 and Scope 2(market-based)GHG emissions4 were 15.1 million tCO2e(2021:14.0 million tCO2e),including 2.3 million tCO2e(2021:2.3 million tCO2e)due to land use change and peat oxidation.Our GHG emission intensity in 2022 was 150 kgCO2e per MT of product,excluding shipping(2021:140 kgCO2e per MT of product).The increase was due to several projects(delayed due to COVID-19)which relied on non-renewable fuel sources starting operations in 2022.With a handful of similar projects that are commissioning this year,we foresee further potential increase in our emission intensity in the near future before reductions from our climate roadmap take effect.Our biogenic5 emissions were 11.8 million tCO2e.We have set a target to reduce our GHG emissions intensity by 15%for all of our palm oil mills by 2023,against a 2016 baseline of 0.82 tCO2e per MT CPO.This target applies to all our mills in Indonesia,Malaysia,Ghana and Nigeria,regardless of RSPO certification status.Our GHG emissions intensity in 2022 was 0.68 kgCO2e per MT CPO,below our set target for 2023.This is the result of our continued efforts to increase use of biomass as fuel and operating our methane capture plants at maximum efficiency.20192019202220223012,868,0077,485,7201,969,926250NUMBER OF VEHICLESKM TRAVELLEDDIESEL CONSUMPTION(LITRE)00502,000,0004,000,0006,000,0008,000,00010,000,00012,000,0001001502002503003502.6m 1.2m1.2m1.3m7,3000.2m4.3m1.1m9.4m1.1m9.6m1.1m10.3m7,7000.2m4.6m8,4000.2m5.2m2.5m2.5mOIL PALM PLANTATIONSOIL PALM PLANTATIONS6PALM OIL MILLS
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(Translation)1 Corporate Governance Report Mitsubishi Corporation Report date:June 23,2023 Mitsubish.
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2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|2CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWTable of Contents 3 A MESSAGE FROM OUR CHAIRMAN AND CEO4 OUR GLOBAL CITIZENSHIP&SUSTAINABILITY APPROACH 6 PROGRESS ON OUR GOALS10 INTEGRATED CIRCULARITY 15 SUSTAINABLE MATERIALS20 RESPONSIBLE DESIGN 25 RESPONSIBLE SOURCING31 CLIMATE 36 WATER STEWARDSHIP38 WASTE MANAGEMENT40 CHEMICAL MANAGEMENT42 BIODIVERSITY45 DIVERSITY,EQUITY&INCLUSION55 EMPLOYEE WELL-BEING 58 COMMUNITY ENGAGEMENT&PHILANTHROPY71 RIGHTS&EMPOWERMENT IN THE SUPPLY CHAIN84 GLOBAL CITIZENSHIP&SUSTAINABILITY GOVERNANCE 86 ETHICS&COMPLIANCE88 DATA PRIVACY&SECURITY90 COLLABORATING FOR IMPACT 92 GLOBAL REPORTING INITIATIVE INDEX105 SUSTAINABILITY ACCOUNTING STANDARDS BOARD INDEX110 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES INDEX111 HIGG BRM PERFORMANCEINTRODUCTION&OVERVIEW 2CREATE WITH INTENT 9PROTECT THE ENVIRONMENT 30CHAMPION BETTER LIVES 44GOVERNANCE 832023 ESG SUPPLEMENT 89ABOUT THIS REPORT 1122023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|3CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWA Message from Our Chairman and CEODear All,From the very beginning,Ralph Laurens Purpose has been to inspire the dream of a better life through authenticity and timeless style.For more than 50 years,this commitment has anchored our every action,starting with the creation of iconic products that our consumers will treasure for a lifetime and pass down through generations.Today,that commitment goes even further.We are challenging ourselves to lead the way in more deeply contributing to a better,more sustainable world in the ways we create products,value nature and champion the people and communities we touch.Thats why last year,we introduced the next chapter in our Citizenship and Sustainability journey,Timeless by Design.Our teams have made meaningful progress in the last year,including:Supporting the circular economy with the introduction of our Cradle to Cradle(C2C)Certified Gold Cashmere Sweater,the first of five Ralph Lauren iconic products that weve committed to have C2C Certified by 2025;Meeting our zero waste goal by diverting 92%of waste from landfill and incineration across our distribution centers;Achieving our goal to increase women in factory leadership by 25%,making progress on our path to parity in our supply chain;Furthering diversity in our organization by achieving our goal to ensure at least 20%of our Global Leadership Team is composed of racially and ethnically diverse talent;Deepening our brand storytelling to make our portrayal of the American dream inclusive of the diverse communities that inspire us;Expanding our impact with equity-focused partnerships across the globe;and Committing to a$25 million investment through The Ralph Lauren Corporate Foundation to expand or establish five cancer centers in underserved communities,including the recently opened Ralph Lauren Center for Cancer Prevention at Georgetown Lombardi Comprehensive Cancer Center in Washington,D.C.Thank you to the teams and partners whose leadership,dedication and creativity are represented by the work reflected in this report.Though there remains much more to do,we are proud of our progress and energized to take on the work ahead.This is the better life all of us want for ourselves,our families and friends all around the world.This is the dream of a better life made into a reality.Ralph LaurenExecutive Chairman and Chief Creative OfficerPatrice LouvetPresident and Chief Executive Officer2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|4CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Global Citizenship&Sustainability Approach This ethos of timelessness extends beyond our products to the lives,communities and natural resources our business intersects.Our Purpose is to inspire the dream of a better life through authenticity and timeless style.Timeless by Design is how we are applying our Companys Purpose to our approach to citizenship and sustainability.We live this commitment by empowering our employees,through the charitable work we undertake through our Company and The Ralph Lauren Corporate Foundation and with a continued focus on advancing a more circular apparel industry.From the materials we use to how we make our iconic products,we consider timeless style throughout our design process ensuring our philosophy of timelessness is embedded from inspiration through to our products every use and reuse.Our 2023 Global Citizenship&Sustainability Report outlines progress on our goals and commitments progress that is anchored in our Purpose and created with and for our people,communities and partners.But we know we must go further,and we cant reach our goals alone because,at its core,Timeless by Design is about ensuring our business can meet the needs of all of our stakeholders now and into the future.Timeless by Design Since our founding,we have believed in creating things that are timeless that last and that never go out of style.Our iconic products are created to be worn,loved and passed on through generations.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|5CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCreate with Intent Grounded in our enduring philosophy of timelessness,we are working to implement circular principles and instill cultural awareness practices into our design and development process.By designing with timelessness in mind from the start,we are enabling our products to live on responsibly and helping our consumers to love their items longer.Protect Our EnvironmentBy adopting practices that help preserve the worlds natural resources,we can be stewards in protecting our environment for generations to come.Beyond creating products more responsibly,we are working to operate in ways that respect our planet,such as transitioning to renewable energy,diverting waste from landfill and incineration,and efficiently managing water for our business and the communities where we operate.Champion Better LivesShaping a business that is timeless and has a positive impact on tomorrow means building relationships that stand the test of time and ensuring that everyone is included,respected and empowered.Thats why were committed to supporting our employees,our partners and those within our communities working to build a brighter future.Our StrategyTimeless by Design is our global approach to citizenship and sustainability.With this as our North Star,we aim to reduce our overall environmental impact and champion the people and communities that intersect our business.RESPONSIBLE DESIGNCHEMICAL MANAGEMENTCLIMATEWASTE MANAGEMENTWATER STEWARDSHIPCOMMUNITY ENGAGEMENT&PHILANTHROPYRIGHTS&EMPOWERMENT IN THE SUPPLY CHAINEMPLOYEE WELL-BEINGDIVERSITY,EQUITY&INCLUSIONSUSTAINABLE MATERIALSRESPONSIBLE SOURCINGINTEGRATED CIRCULARITYBIODIVERSITYOur approach and initiatives are addressing global priorities,contributing to tangible solutions and moving us closer to achieving meaningful global targets.To ensure alignment of our initiatives with these global efforts,elements of Timeless by Design support the United Nations Sustainable Development Goals(SDGs).Ralph Laurens current disclosure of programs,metrics and policies were benchmarked against all 17 SDGs to identify and determine where the Company has the biggest opportunity to contribute to the following SDGs:2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|6CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWProgress on Our GoalsTARGETPROGRESSEnable our past and future products to live on responsibly by 2030Made advancements toward our circular product,experience and investment goalsFive of our iconic products will be Cradle to Cradle(C2C)Certified by 2025Introduced our Cradle to Cradle(C2C)Certified Gold Luxury Cashmere Sweater,the first of five C2C Certified products,to consumersOffer high quality products made with 100%recycled cotton by 2025Developed products with increasingly higher recycled cotton content,including the New Denim Project capsuleInvest in scaling innovative technologies and regenerative practices to advance a circular economy by 2025Launched the POLO MIRUM sneaker and crossbody pouch,which are partially made from a 100%plastic-free material from Natural Fiber Welding(NFW)Set and implement circular principles into our design and development process by 2025Began developing principles with expert partners and increased engagement with design teamsConnect consumers with options to rent,repair and recirculate our products in select top cities by 2025Launched channel for recycling end-of-use 100shmere products and continued to grow our vintage offeringsAchieve 100%sustainably sourced key materials by 202589%of our units produced met at least one of our sustainable material criteria in FY23 up from 77%in FY22100%of our key wood suppliers for new RL store interiors will use sustainably sourced wood substrates(certified by a forest management system,repurposed or recycled)by 2025At the end of FY23,37%of our suppliers had committed to meeting the benchmark,compared to 11%in FY22Ensure all of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally cognizant designEnhanced the sustainable design training modules available to our design and product teams80%of our business will be with suppliers that meet key&strategic supplier criteria with performance and potential in business,social and environmental performance by 202550%of our business was with key&strategic suppliers that met business,social and environmental performance criteriaCREATE WITH INTENT2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|7CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWTARGETPROGRESSReduce absolute Scope 1,2 and 3 GHG emissions by 30%by 2030(SBTi-approved)from a FY20 base yearDecreased absolute emissions by 29%in FY23 from our FY20 baselineAchieve net zero by 2040Submitted our net zero target for SBTi approval against its new Net Zero StandardPower our owned and operated offices,distribution centers and stores with 100%renewable electricity by 2025Continued to invest in renewable energy attribute certificates,accounting for 8%of our global electricity use,and increased the number of power purchase agreements we are pursuing across key regionsAchieve at least a 20%reduction in total water use across our operations and value chain,compared to a FY20 baseline,by 2025Decreased total water use across our operations and value chain by 25%from our FY20 baselineAchieve 100%recyclable,reusable or sustainably sourced packaging materials by 2025Transitioned all key suppliers to 100%recycled content polybags;continued to remove and recycle all polybags from reduced packaging ordersAchieve zero waste to landfill across our distribution centers by 2023Achieved our goal for zero waste to landfill in our distribution centers,with 92%of waste divertedEliminate the use of hazardous chemicals in our supply chain by 2025Gained 79%visibility of chemical use in manufacturing(by spend);84%of chemicals reported conform with the Manufacturing Restricted Substances List(MRSL)Develop a biodiversity strategy and set goals aligned with the Science Based Targets for Nature by 2024Selected partner to conduct a formal assessment of our nature-related impacts and dependencies,to inform development of a biodiversity strategy and goalsPROTECT THE ENVIRONMENT2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|8CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCHAMPION BETTER LIVESTARGETPROGRESSEnsure at least 20%of our Global Leadership Team is comprised of diverse racial and ethnic groups by FY23Achieved our goal to ensure 20%of our Global Leadership Team is made up of racially and ethnically diverse talentMaintain gender parity with equal representation in leadership positions at the VP level and aboveMaintained 50%of VP and above roles held by womenIncrease Company employee volunteer hours by 25%compared to a FY22 baselineIncreased Company employee volunteer hours by 500%Make empowerment and life skills programs available to 250,000 workers across our supply chain by 2030Reached over 98,000 workers through our empowerment and life skills programs to dateAchieve a 25%increase of women in factory leadership that seeks to create a path to parity by 2025Increased women in factory leadership by 27ross four target countriesRoll out our Wage Management Strategy to all of our strategic and key suppliers to address fair and timely compensation for factory workers by FY23Achieved our goal to roll out our strategy to all strategic and key suppliersAll strategic and key suppliers will have the capabilities and systems in place to deliver fair and timely compensation by 2030New goal as of FY23;progress will be measured annually 9CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEW 9Our journey is anchored in our enduring philosophy of timelessness and authenticity.We aim to create products that are made to be worn,loved and live on responsibly.As we continue to evolve in how we design our products,we are using more sustainable materials,implementing circular principles and instilling cultural awareness practices.Create with IntentEXPLORE THIS SECTION10 INTEGRATED CIRCULARITY 15 SUSTAINABLE MATERIALS20 RESPONSIBLE DESIGN25 RESPONSIBLE SOURCING 2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|10CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Circularity Approach Circularity is a systems-level approach to eliminating waste,recirculating materials and regenerating resources for a more sustainable economy.Our enduring philosophy of timelessness guides our overall approach to circularity.Our circularity strategy has three main elements:Designing our products according to circular principles Connecting consumers to services that enable product longevity and reuse Investing in circular systems and innovation across the industryIntegrated CircularityWe are designing products with circularity in mind,connecting consumers to opportunities for repair and recirculation and investing in scalable innovation.These efforts support our commitment to timeless style,creating products that stand the test of time.2030 GOAL Enable our past and future products to live on responsibly2025 GOALS Five of our iconic products will be Cradle to Cradle(C2C)Certified products Offer high-quality products made with 100%recycled cotton Invest in scaling innovative technologies and regenerative practices to advance a circular economy Set and implement circular principles into our design and development process Connect consumers with options to rent,repair and recirculate our products in select top cities2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|11CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWLive On Promise In 2022,we introduced our Live On promise to take our enduring philosophy of timelessness even further with a new commitment:By 2030,Ralph Lauren will enable our past and future products to live on responsibly.To deliver on this promise,we committed to designing new and reimagined products according to circular principles.To help extend the life of Ralph Lauren products old and new we are also enabling consumers to rent,repair and recirculate our items in select top cities.We also continue to make investments to help advance circular innovation across the industry.This year,we strengthened our commitment by bringing our first C2C Certified product to market,initiating our circular principles workstream with internal and external partners and continuing our efforts to present vintage Ralph Lauren offerings to our consumers.Our POLO MIRUM sneaker and crossbody pouch are partially made from a 100%plastic-free material,created without relying on petrochemical and synthetic inputs.By 2025,we will invest in scaling innovative technologies and regenerative practices to advance a circular economy.ADVANCE THE CIRCULAR ECONOMYOur cashmere recycling program implemented as part of the C2C certification process connects consumers to a channel for recycling their end-of-use 100shmere products.We have been engaging in the resale market by selling curated collections of iconic,vintage Ralph Lauren products.These collections can be found on our digital platforms and in select stores.By 2025,we will connect consumers with ways to rent,repair and recirculate our products in select top cities.ENABLE CIRCULAR CONSUMER EXPERIENCES We reimagined our iconic luxury crewneck cashmere sweater to be our first Cradle to Cradle Certified product.We are developing products with increasingly higher recycled cotton content,including the New Denim Project capsule.We are initiating our circular principles workstream with internal and external partners.DESIGN FOR CIRCULARITY GOALS PROGRESS GOALS PROGRESS GOALS PROGRESSBy 2025,five of our iconic products will be C2C Certified.By 2025,we will offer high-quality products made with 100%recycled cotton.By 2025,we will set and implement circular principles into our design and development process.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|12CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCIRCULARITY WORKING GROUPOur Circularity Working Group,relaunched in 2022,works across the organization to integrate circularity in all segments of our products lifecycle.In the past year,the cross-functional team has focused on establishing a structure to facilitate collaboration within the organization and with our external partners.Product Management develops product with circular principlesMarketing communicates the product storyMerchandising selects what we develop to sell to our wholesale and retail partnersSourcing identifies,develops and secures certified sources of sustainable componentsBusiness Innovation develops circular business models Product Innovation identifies and tests new solutionsSustainability determines the environmental impact Design conceptualizes collections that integrate circular concepts into our brand heritageCradle to Cradle Certified The Cradle to Cradle Product Innovation Institutes C2C certification program is the global standard for products that are safe,circular and responsibly made.We chose the C2C standard because the assessment categories mirror our own sustainability goals and take a holistic approach to designing for circularity.To achieve C2C certification,a product or material is assessed across five categories of performance and can achieve levels ranging from Bronze to Platinum.Those categories include:Material health Product circularity Clean air and climate protection Water and soil stewardship Social fairnessC2C CERTIFIED GOLD CASHMERE SWEATER LAUNCH During the 2022 Global Fashion Summit in Copenhagen,we unveiled our C2C Certified Gold Cashmere Sweater,an iconic product made to be worn,loved and live on responsibly for generations to come.Available in Mens Purple Label and Womens Collection brands,the first-of-its-kind luxury crewneck cashmere sweater is the first of five iconic Ralph Lauren products that we committed to have C2C Certified by 2025.Every component of the sweater has been certified,from the cashmere fiber to its rich dyes and iconic label made with organic cotton.The C2C Certified Gold Cashmere Sweater replaced the original iconic product,and our certified assortment will expand to include other cashmere products.We are also cascading our learnings from the certification process to inform the design and development of future products.At least one additional product will be submitted for certification in 2023.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|13CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCashmere Recycling ProgramDeveloped as part of the C2C certification process,we launched a recycling program for 100shmere in partnership with Re-Verso,a leading textile production company that bridges science and technology to create a circular economy manufacturing system for high-quality wool and cashmere.The program,initially available in North America and Europe,allows consumers to request a prepaid mailing label from our website for their end-of-use cashmere product to be recycled.Network Partner of the Ellen MacArthur FoundationThe Ellen MacArthur Foundation(EMF)has a leading circular economy Network that brings together businesses,innovators,cities,universities and thought leaders to build a circular economy and scale solutions globally.Ralph Lauren has been a Network Partner since 2021.The Network has created a vision of a circular fashion economy where clothes are designed to be made from safe,recycled and/or renewable inputs,worn longer,and repurposed;one that works with the fashion industry to re-envision and redesign the way products are made and used.We participated in a number of the Network events and offerings in 2022 to further circularity efforts in our Company and the fashion industry,including:Industry WorkshopsIn 2022,we participated in a fall workshop in Stockholm,Sweden,where we had the opportunity to work with EMFs full Network of Partners to explore solutions to circular economy challenges across the entire value chain.Master ClassesRalph Lauren staff members enrolled in a circular economy master class for the first time,provided through Exeter University.This educational opportunity aims to extend the knowledge of those familiar with circular principles to help enable action toward commercial benefits.The Jeans Redesign ProjectWe are also a participant of EMFs Jeans Redesign Project,which consists of 100 brands,mills and manufacturers and aims to demonstrate how a garment can be designed and made for a circular economy.The Jeans Redesign Guidelines act as a blueprint and provide a starting point to design and manufacture products aligned with the principles of a circular economy.We are developing a 100%recycled denim product to meet or exceed The Jeans Redesign Guidelines for launch in 2023.Through our participation in The Jeans Redesign and by using Circulytics,a company-level measuring tool developed by EMF,Ralph Lauren is taking a step forward in its long-term circular economy journey.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|14CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWDigital Product IDDigital Product IDs(DPIDs)will be crucial to enabling technology that supports a circular economy.A unique digital ID is placed in each item during production to provide data related to the garments origin and makeup when the products QR label is scanned.This process enables consumers and marketplaces to authenticate products directly with the brand owner and discourages the sale of counterfeit clothing in resale,protecting consumers,brands and marketplaces.In 2019,Ralph Lauren began rolling out this technology across our portfolio,starting with the Polo brand.DPIDs are currently in more than 220 million Polo products and can be used to authenticate the products.RALPH LAUREN CIRCULARITY PRINCIPLES FOR DESIGNA foundational element of reaching our circularity goals is the establishment of product design and development principles aligned to the core principles of circularity.We have engaged an expert partner to support us in establishing Ralph Lauren-specific principles in 2023.Increasing Product AuthenticationIncreasingly,consumers are seeking to align with brands whose value chains are ethical,environmental-friendly and reliable.New authentication and digital traceability tools can be leveraged to demonstrate or transparently share information with interested consumers.The World Economic Forum(WEF),Ralph Lauren,Vestiaire Collective and Global Innovator EVRYTHNG,in collaboration with Bain&Company,launched a pilot to ensure the authentication of fashion products in the secondhand market through digital ID technology.This pilot established a global collaboration between manufacturers and brand owners,suppliers,consumer representatives and regulators.It leverages new digital traceability and authentication technologies to drive circularity and sustainability,creating value for all stakeholders in the fashion value chain.As a second phase,Ralph Lauren and WEF,in partnership with technology providers,resellers and brands,have created a working group to create the standards and tools to bring this pilot to scale.The first pilot of the new authentication platform has shown that companies like Ralph Lauren can have a direct connection to secondary-market consumers while gaining insight into the lifespan of our clothes.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|15CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Approach to Sustainable Materials Ralph Lauren products are designed to be timeless and worn for generations.With this in mind,we choose our product materials thoughtfully to ensure high-quality and durability.Our sustainable materials strategy has a holistic orientation,inclusive of impacts across the environment,animal welfare,land use and farmer livelihoods.We look to source materials from certifications and programs that drive positive change in these areas.Our efforts and goals are focused on the key materials that make up 92.2%of our material use:cotton,wool,cashmere,leather,viscose and polyester.1 In April 2023,we updated our Animal Welfare Policy to articulate our aims for all our animal-derived materials and reflect the latest science on the proper care of animals.Enhanced traceability and transparency across our value chain is a critical enabler of our efforts to reduce the impact of our material use and support improved practices in material production,especially at the farm level.We are going beyond sourcing certified materials and are working towards increasing traceability of our supply chain.For more on our approach and progress around transparency and traceability,see the Responsible Sourcing section of this report.Sustainable MaterialsWe seek to increase the use of more sustainable materials in our industry and are committed to using materials in ways that reduce environmental impact,protect biodiversity and animal welfare,support livelihoods and improve the traceability of raw materials.2025 GOALS Achieve 100%sustainably sourced key materials by 2025 100%of our key wood suppliers for new Ralph Lauren store interiors will use sustainably sourced wood substrates(certified by a forest management system,repurposed or recycled)by 2025TEXTILE EXCHANGE BRAND CERTIFICATIONChain of custody standards are used by the fashion industry to validate the accuracy of claims about fiber content in a product.The recycled,organic and Responsible Animal Fiber standards owned by Textile Exchange require every member of the value chain to undergo a third-party audit to become certified to use these standards on customer-facing products.Ralph Lauren became a certified brand in 2023.Our first fully certified product will be Responsible Wool Standard(RWS)sweaters,available in our Fall 23 Polo collection.1 Down is a key material but as a fill material it is quantified separately.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|16CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEW80.1%Cotton6.5%Polyester6.1%Other5.4%Animal derived1.6%Nylon0.3%ViscoseKEY MATERIALS GOALS 100%of our cotton will be sustainably sourced by 2025,defined as:Better Cotton,organic,transitional/in-conversion,recycled,regenerative,U.S.Cotton Trust Protocol or Fair Trade-certified 100%recycled polyester by 2025 100%Responsible Wool Standard-certified or recycled wool by 2025 100%of viscose will be sourced and verified through CanopyStyle audits by 2025 100%Responsible Down Standard-certified or recycled down and feathers by 2023 100%of our tanned leather will be Leather Working Group-certified by 2025 100%Sustainable Fibre Alliance-certified(or equivalent)or recycled cashmere by 2025FY23 MATERIAL USE1ANIMAL DERIVED2.9%Leather/Skins2.1%Wool0.3shmere0.1%SilkGlobal Research and Development StudioOur Global Research and Development Studio is a physical and virtual resource built on the principle that all materials and techniques should have a sustainability attribute.This central hub contributes to our progress on our sustainable materials goals by expanding our library of materials and processes available for adoption.Our 3D research and development program provides a tool for developing a product in 3D before creating a physical sample,helping to reduce material waste.We have expanded a robust 3D material and trim library for use in digital design and development.89%of our units produced met at least one of our sustainable material criteria in FY23 up from 77%in FY22.Natural Fiber Welding Beginning in FY22,we made an early investment in Natural Fiber Welding(NFW),whose groundbreaking technology is enabling us to reduce our use of synthetic materials.Last year,we launched the RLX CLARUS Polo Shirt,made with the worlds first high-performance cotton fabric comprised of 50%recycled cotton.We continue to invest in NFWs innovative materials to launch new products.In March 2023,we released the POLO MIRUM sneaker and crossbody pouch.MIRUM is a 100%plastic-free material,created without relying on petrochemical and synthetic inputs.1 Our efforts and goals are focused on the key materials that make up 92.2%of our material use:cotton,wool,down,cashmere,leather,viscose,and polyester.Down is a key material but as a fill material it is quantified separately.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|17CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWMaking Progress on Sustainable Cotton Cotton is the most widely used natural fiber for clothing production1 and accounts for more than 80%of our material use.We invest in the increased use of sustainable cotton and seek to support the scaling of improved practices in cotton cultivation,which benefits our business,the environment and the farmers that grow it.In FY23,94%of the cotton units we produced met at least one of our defined sustainability attributes(organic,transitional/in-conversion,Better Cotton,recycled,regenerative,U.S.Cotton Trust Protocol or Fair Trade).94%of the cotton units we produced met at least one of our defined sustainability attributes.In FY23,U.S.COTTON TRUST PROTOCOL MEMBERSHIPIn FY23,building on the Companys commitment to scale more sustainable farming practices and echoing The Ralph Lauren Corporate Foundations existing support of the U.S.Regenerative Cotton Fund(USRCF),Ralph Lauren Corporation became a member of the U.S.Cotton Trust Protocol(Trust Protocol).The Trust Protocol helps farmers transition to more sustainable cotton cultivation practices and enables growers to measure the environmental impacts of their operation to support continuous improvement.It is the only farm-level,science-based program that provides quantifiable,verifiable goals in six key sustainability metrics including land use,soil carbon,water management,soil loss,greenhouse gas emissions and energy efficiency,as well as offers article-level supply chain transparency to all members.Our membership in the Trust Protocol is an important part of our efforts to build a more resilient cotton industry.In 2022,the Trust Protocol was awarded funding for the U.S.Climate Smart Cotton Program as part of the U.S.Department of Agriculture Partnership for Climate Smart Commodities pilot projects.The multistakeholder initiative includes the nonprofit Soil Health Institute,which The Ralph Lauren Corporate Foundation supports through the USRCF,as an implementing partner.This grant-funded pilot builds upon the four pillars of Climate Smart Agriculture(CSA)practices allowing for improved soil health,increased drought and flood resilience,advanced nutrient efficiency,decreased soil erosion and reduced greenhouse gas emissions.It will provide technical and financial assistance to more than 1,650 U.S.cotton farmers to support the adoption of CSA practices on more than one million acres over the next five years,scaling the impact and reach of the work initiated through the USRCF.For more information on the Trust Protocol,read their annual report;for more information on the USRCF,see the Community Engagement&Philanthropy section of this report.1 World Resources Institute2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|18CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWAnimal Welfare Our Animal Welfare Policy,which we updated in April 2023,outlines our commitment to the well-being and respectful treatment of animals,including our longstanding ban on the use of fur and our aim to have all of our animal-derived materials certified to an animal welfare standard,where available.While only 5.4%of our total material use comes from animal-derived sources,we believe all animals should be treated with care and respect throughout all stages of life.We leverage animal fiber certification schemes to ensure alignment with this principle,as well as to help address some of the key environmental impacts associated with raising animals.We are demonstrating our commitment to animal welfare by prioritizing standards such as the Responsible Animal Fiber standards for wool and down and Sustainable Fibre Alliance for cashmere.Each of these standards has requirements in place for animal welfare at the farm level.Leather When we set our key materials goals in 2019,we built them with a strong ambition to map and trace our supply chains for these materials,including leather,and that ambition remains today.(See the Responsible Sourcing section of this report for more information on our traceability efforts.)The leather supply chain is long and complex,and one of its most significant challenges is the lack of transparency.It is also a shared supply chain across industries.While a number of animal welfare and land management standards exist for cattle,chain of custody infrastructure specific to the leather supply chain is limited and continues to be developed.We remain supportive of programs that aim to drive positive impact at the farm level while these advancements continue,such as the Leather Impact Accelerator(LIA).LIA is a set of tools developed by Textile Exchange focused on enabling leather supply chain members,from farmers to retailers,to contribute to a more responsible leather supply chain.These tools(individually)establish minimum social,environmental and animal welfare thresholds for practices at the farm and leather production levels and give recognition to producers who meet them.The tools also include cattle tracking requirements to lay the foundation for farm-to-farm traceability early in the supply chain.In FY23 we invested in Impact Partnership Incentives,which are one of the LIA tools,for a second year.WoolAt the farm level,the Responsible Wool Standard(RWS)is used to certify that the Five Freedoms of animal welfare are protected,and progressive methods of land management are practiced on the farm.As wool moves through the supply chain,the RWS ensures a strong chain of custody is in place at every stage so the customer can be confident that the finished product contains wool that came from an RWS-certified farm.IMPROVING SUSTAINABILITY OF KEY MATERIALS Cashmere Our cashmere strategy focuses on sourcing Sustainable Fibre Alliance-certified virgin cashmere,or recycled cashmere,which typically comes from post-consumer recycled textiles or pre-consumer industrial waste.Down We have sourced 100%Responsible Down Standard(RDS)-certified virgin down since 2019.Viscose We ask our suppliers to source viscose from manufacturers who have a Green Shirt audit score in Canopys Hot Button report and are exploring opportunities to use viscose that incorporates recycled material inputs.Polyester We continue to prioritize recycled polyester,and in the coming year the Global Research and Development team will focus on researching alternative feedstock options for recycled polyester.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|19CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWIn FY23,we built upon our work with RWS-certified suppliers to develop products that meet all the requirements for labeling with the RWS logo.Our first RWS-certified Polo sweaters will be in stores in Fall 23 and designated with special hangtags.Sustainable Store InteriorsOur store interiors reflect timelessness with natural materials that get better with age,such as wood and stone.Sustainability guidelines from the U.S.Green Building Council and the Forest Stewardship Council(FSC),among others,inform our interior materials sourcing.Our Forest Protection Policy outlines our commitment to protecting the worlds forests and guides selection of wood suppliers for our store interiors.Our goal is to have 100%of our key wood suppliers use sustainably sourced(certified by a forest management system,repurposed or recycled)wood substrates for new Ralph Lauren store interiors by 2025.Nineteen suppliers committed to meeting the benchmark by the end of FY23,which represents 37%of our suppliers,compared to 11%in the previous year.In FY23,our key wood suppliers represented 99%of our business volume in this category.Our new retail store in the iconic Battersea Power Station in London was executed with FSC-certified wood flooring,and 80%of the freestanding floor fixtures and almost half of all artwork were repurposed pieces.PROGRESS HIGHLIGHTS 100%of wood hangers produced for Ralph Lauren store interiors in FY23 were made from wood substrates certified by a forest management system.69%of wood flooring installed in all Retail and Outlet Stores globally in FY23 was sustainably sourced.100%of Childrens and Lauren millwork fixtures and wall units produced for U.S.shop-in-shops in FY23 were made from sustainably sourced woods.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|20CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Approach to Responsible DesignAt Ralph Lauren,we have always been inspired by the beautiful,complex and interconnected elements that make up our world:its communities,histories,arts,crafts and most of all its people.We are deepening our efforts to use the inspiration that captivates our imagination in a way that is culturally cognizant.We are on a journey to evolve our approach to a model built on collaboration,ensuring that our products and storytelling are inclusive of the unique and diverse cultures and people that inform and inspire us.In doing so,our products and the way we showcase them will have an even greater degree of authenticity and timelessness.Design with Intent Steering CommitteeIn 2022,we created a new steering committee of senior cross-functional leaders to provide strategic oversight of our Design with Intent department and its workstreams.The committee collaborates across the organization to drive understanding of cultural sustainability,evolve our roadmap and best practices and open pathways to achieving our goals.The committee collaborates with Employee Impact Groups and creative directors to set our shared intent.Responsible DesignFor more than 50 years,our design ethos has been inspired by the world around us.As we evaluate and evolve our cultural inspiration,we know that it is important to involve authentic community voices in the products we design and the stories we tell.We take seriously our obligation to use the histories,arts,crafts and cultures that inspire our designs and storytelling in a way that is culturally responsible and sustainable.ONGOING GOAL Ensure all of our design,production and merchant teams will receive annual training on sustainable,circular,inclusive and culturally cognizant design2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|21CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWDesign with Intent TeamOur Design with Intent workstream aims to ensure the inspiration for our products is used in a way that is culturally aware and responsible in product design,creation and development as well as every point along the customer journey,including our storytelling.The Design with Intent team was formally launched in 2022 to guide and operationalize how Ralph Lauren approaches culturally sustainable design and go-to-market execution.The team is focused on three strategic priorities:Develop the cultural sustainability principles that guide our work and decision-making Mobilize cross-functional teams to enable collaborative product and brand initiatives Build partnerships and pathways to collaboration with artisans and creative makersDESIGN WITH INTENT GOVERNANCE AND ENGAGEMENT STRUCTURENominating,Governance,Citizenship&Sustainability CommitteeThe Board of Directors committee with oversight of environmental and social risks and opportunities,of which Design with Intent is now part.Design with Intent Steering CommitteeThe senior cross-functional team responsible for strategic oversight and ensuring alignment of resources and priorities to enable execution across Design with Intent goals.Cross-Functional PartnersCultural Awareness CouncilDesign with Intent Community Group:A Place for Employee AllyshipInternal teams that support and deliver progress across co-created priority areas and goals.Functional leads from Legal/Cultural IP,DE&I,Corporate Communications and Design with Intent,responsible for setting policy and guidelines and evaluating brand risk,priorities and overall position.The global community of employees who connect to create a space for safe conversations and change agency within Ralph Lauren.Design with Intent TeamResponsible for setting strategy and driving implementation and action.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|22CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWBuilding Cultural CognizanceAs we audit the sources of our design inspiration that are embedded in our brand codes,we are establishing short-and mid-term goals and priorities.These will serve our larger objective to build a holistic cultural sustainability framework that follows a products lifecycle,from concept design and sourcing to creation and go-to-market storytelling.Our Cultural Awareness Council(the Council)enables progress by working cross-functionally to create and implement culturally sustainable policies,guidelines and best practices.The Council holds weekly review sessions with our design and concept teams,and weekly marketing and creative review sessions to support cultural sustainability across our product creation and marketing efforts.Employee Impact Group(EIG)leaders and external cultural and textile experts are consulted as needed to help inform our decision-making and our development of authentic partnerships,programs and storytelling.Specifically,our external Native American&Indigenous Advisory Council,which formally convenes annually,is a group of Indigenous leaders across cultural,historical,educational,legal,media and creative disciplines that review and provide guidance on the intentions and impacts of our Design with Intent work.Our Cultural Awareness Guidelines support our approach.We update these annually according to emerging best practices and guidance from our network of external advisors and distribute them to all teams with a role in design,merchandising,advertising and marketing.We inform and prepare these teams to apply our guidelines through mandatory cultural awareness educational programs,including during new hire onboarding and in annual employee trainings.CULTURAL COUNCIL ENGAGEMENT STRUCTURE The senior cross-functional team responsible for strategic oversight and ensuring alignment of resources and priorities to enable execution across Design with Intent goals.Functional leads from Legal/Cultural IP,DE&I,Corporate Communications and Design with Intent responsible for setting policy and guidelines and evaluating brand risk,priorities and overall position.The Cultural Awareness Council engages with external expertise and EIGs as needed.Design with Intent Steering CommitteeCultural Awareness Council Weekly Campaign ReviewA weekly session for creative and marketing team leaders to present work-in-progress promotional campaigns for review to the Cultural Awareness Council.Cultural Awareness Council Weekly Design ReviewA weekly session for creative and design leaders to present product collection and campaign concepts for review to the Cultural Awareness Council.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|23CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWEngagement with Native Americanand Indigenous CommunitiesFor more than 50 years,we have drawn design and storytelling inspiration from the beautiful lands and individuals around us,and as we continue to evolve and grow,we believe it is important to more closely partner with the communities that inspire us.We recognize that we must honor the Indigenous communities that so richly contribute to American culture,and the cultures of many other countries.As a part of this work,we connect with Native American and Indigenous-focused organizations to apply greater cultural cognizance to our work and scale our impact in the communities we serve.Connecting with Indigenous Artisans In August 2022,a delegation of Cultural Awareness Council members attended the Southwestern Association for Indian Arts(SWAIA)annual art market in Santa Fe,New Mexico,to build on our understanding of Native perspectives and connect with Indigenous creatives and community leaders.The event showcases the work of more than 1,000 Native artists from more than 100 tribal communities in North America and Canada and generates nearly$160 million in revenue for the artists and the Santa Fe community each year1.In November 2022,members of our Cultural Awareness Council attended Original to connect with artisans and to learn more about the beauty and legacy of traditional Mexican craftsmanship.This annual celebration of Indigenous Mexican culture and art in Mexico City,led by the Ministry of Culture of the Government of Mexico,publicly showcases the work of about 1,000 artisans from across Mexico,who represent nearly 5,000 makers from the broader Mexican handicraft community.Creative Futures CollectiveWe partner with Creative Futures Collective(CFC),an organization that empowers the next generation of creative leaders from disenfranchised or system-impacted communities,to provide an opportunity for mentorship,employment and exposure.We sponsored two CFC fellows to participate in SWAIA.Alongside mentorship support,we featured their journey in their own words and through their own lens via editorial stories on our consumer-facing RL Mag platform and our employee intranet.We are also exploring additional opportunities to engage with CFC on talent recruitment and development on an ongoing basis.1 Swaia.orgPhoto by Nate Lemuel of Darklisted Photography2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|24CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWThe Art of Indigenous FashionThe Ralph Lauren Corporation is proud to support the Art of Indigenous Fashion exhibition at the Museum of Contemporary Native Arts in Santa Fe,New Mexico.As a part of the Institute of American Indian Arts(IAIA),the museum took a curatorial approach to the exhibit to offer insights into the perspectives of Indigenous designers,beyond the visual and material qualities of their work.Support for Native and Indigenous EducationAs Education,Advocacy and Access is a key pillar of our philanthropic work across the Company and The Ralph Lauren Corporate Foundation,we remain dedicated to providing next-generation leaders with opportunities to access education.The Company continues to support scholarship programs via the American Indian College Fund and launched a two-year Master of Fine Arts scholarship at IAIA,aiming to support Native and Indigenous talent in creative fields of work.Artist in Residence ProgramThe Companys Artists in Residence program invites artisans working with a variety of skill sets,mediums and materials to collaborate with Ralph Laurens design teams.This is intended to be a mutually beneficial exchange of resources,talent and trade techniques.During their tenure,we expect each Artist in Residence to have the opportunity to create a special product collaboration,melding the brilliance and unique skill of the artisan with our core brand sensibilities.Our pilot program with the Polo brand is expected to launch in the coming year featuring traditional Indigenous design motifs created under a model of collaboration.We hope to use learnings from this pilot to inform and scale the program in the future.Because of our design-to-production timeline,we may have pre-designed,existing products already in our pipeline created prior to this evolved model.Any new product featuring Native American design motifs following our Summer 2023 season will be created under the evolved model.In line with our sustainability commitments,we will not be disposing of existing product.In this interim period,we are deepening our efforts to invest in communities of Native and Indigenous artisans.Authentic MakersIn 2022,we were honored to work with Navajo artisan Jimmy Begay Jr.in partnership with Shiprock Santa Fe gallery for our first Authentic Maker program launch.His hand-crafted,stamped,heirloom-quality concho belts were made exclusively for the Ralph Lauren Collection.We showcased Jimmys craftsmanship and shared his story in our online RL Mag platform and via consumer-facing marketing channels.OUR WORK WITH HISTORICALLY BLACK COLLEGES AND UNIVERSITIESWe have continued to expand our partnerships with historically Black colleges and universities(HBCUs).In March 2022,we unveiled a limited-edition collection to honor the rich heritage and sartorial legacy of HBCUs through the lens of Morehouse College and Spelman College.The collection sought to share the history of both schools and build on our commitment to expand our portrayal of the American dream to include the nature of life at HBCUs,a story previously untold in depictions of Ralph Laurens collegiate sensibility.Conceptualized and designed by Morehouse and Spelman alumni at Ralph Lauren,the collection was supported by a campaign featuring an all-Black creative suite and cast comprised of students,faculty and alumni from both colleges.The collection sold out in two days,and we were proud to be recognized for the work with a Fast Company Brands that Matter award and a“Best Collaboration”award from The Impression.For more information on the Companys and the Foundations partnership with HBCUs,including the Foundations$2 million scholarship commitment,please see the Championing Better Lives section of this report.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|25CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWBuilding a Resilient and Responsible Supply ChainEconomic,social and environmental disruptions continued in FY23,and supply chain engagement remained a critical strategy to ensure greater resiliency and sustained commitments to responsible sourcing.Our work in supplier engagement aids our understanding of capacity,capability,and current and future performance potential.This work is vital to creating an agile supply chain ecosystem that can respond to disruption and change while meeting our shared and individual goals.We continue to progress towards our goal to conduct 80%of our business with suppliers that meet the key and strategic supplier criteria which includes business,quality,citizenship and sustainability performance.In FY23,50%of our business was with suppliers that meet the key and strategic supplier criteria.For more information on our procurement practices,refer to our Supply Chain Sustainability Policy.Continuous Supplier Engagement and PartnershipOur Supplier Engagement Strategy(SES)continues to focus on strengthening performance in three key areas:business execution and partnership,citizenship and sustainability,and quality.We communicate our expectations and seek feedback on how to continue being a responsible partner via the following strategies:one-on-one check-ins,semi-annual supplier summits,roundtable discussions,surveys(including the Better Buying Institute Survey)and our Vendor Scorecard.In FY24,we will expand the use of our Scorecard to Tier 2 suppliers.Our Vendor Scorecard has social and environmental performance indicators that enable us to communicate our sustainability expectations,evaluate and monitor the progress of our suppliers and strengthen collaboration on continuous improvement.In FY23,we increased the use of industry tools for our supplier scorecard,including the Higg Facility Environment Module(FEM)and Social Labor Convergence Project(SLCP),as well as the tracking of sustainable material certifications and resource-efficient production practices to ensure alignment between our sourcing strategy and our GC&S goals.We collected Higg FEM data from 270 Tier 1 facilities,representing 90%of our supply chain spend.Among the reporting facilities,255 facilities(89.7%of business spend)have completed data verification by an SAC-approved verifier,an increase from 87%last year.Facilities scored an average of 53 Responsible SourcingTo build a resilient and responsible supply chain,we are continuing to deepen our understanding across our full value chain,strengthen relationships with suppliers and identify areas for improvement.We work with our suppliers to increase transparency,support human rights and promote environmental sustainability.2025 GOAL 80%of our business will be with suppliers that meet key&strategic supplier criteria with performance and potential in business,social and environmental performance50%of our business was with key&strategic suppliers that met business,social and environmental performance.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|26CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWpoints across all sections,with an average of 68 points in the water section,31 points in chemical management section and 77 in the energy section.The expanded FEM rollout also covered 186 mills,a significant increase from 50 facilities last year,representing an estimated 77%(54%in FY22)of our woven,knit,and sweater yarn production.A total of 178 mills(48 in FY22)have completed data verification,with an average score of 58 points across all sections.The mills scored on average 84 points in the energy section,73 points in the water section,and 39 points in the chemical section.This year,we also expanded our scope to our subcontracted processing facilities;a total of 67 facilities completed FEM and 57 facilities completed third-party verification.The subcontracted facilities had an average of 50 points in total score,66 points in water section,31 points in chemical section and 78 points in energy section.Supplier Summits Supplier Summits are important connection points where we bring suppliers together with our teams to engage in two-way dialogue on improving our partnership.It also gives us the opportunity to share important updates and performance trends we are seeing in certain countries or areas.Throughout the year,we hosted roundtables and trainings globally to share updates to our compliance programming and Global Citizenship&Sustainability(GC&S)standards.Additionally,in FY23 we were thrilled to return to in-person summits in India and Bangladesh with our suppliers.In a follow-up session in India dedicated to Worker Well-being,we focused on our core initiatives in compliance monitoring,wage management and womens empowerment,which included a brainstorm and feedback session on how to attract and retain talented workers.For additional details on our diversity,equity and inclusion and women in leadership roundtables,please see Rights and Empowerment in the Supply Chain.OUR APPROACH TO SUPPLIER ENGAGEMENTOnboardingResponsible Exit Qualification Segmentations&Risk Management Development&Innovation Performance Management2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|27CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOwning Our Impact:Our Approach to Responsible Purchasing Practices Our supplier partnerships are a two-way street.We are addressing the role we play in supporting more responsible manufacturing by continuing our commitment to responsible purchasing practices.In particular,we leverage the Better Buying Institute Survey,which helps us further understand the impact of our business on factories and on workers.This feedback helps to uphold accountability in our supplier partnerships and creates a productive forum for developing solutions together.We have created cross-functional working groups to address our key areas of opportunity.Through the working groups,we have progressively built a transformation plan,integrating feedback from the survey and creating tangible goals for progress.We also continue to conduct mandatory training programs on these practices for our buying and sourcing teams.Transparency and TraceabilityEnhancing transparency and traceability across our value chain is foundational to the successful implementation of our GC&S strategy and achievement of our goals.It enables us to better understand our impacts,drive targeted action and investment and track our progress more accurately.This year we took significant steps to increase supply chain visibility and create approaches to chain of custody verification to enhance our traceability efforts.We are committed to improving both transparency into global supply chains and the traceability of our products across Ralph Lauren-specific value chains.Transparency:Deepening our Understanding of Actors in the Value ChainBuilding on our effort to map and disclose our supplier partners,we continued to use Open Supply Hub(formerly Open Apparel Registry)to publish the name,location and parent company of Tier 1 value-adding processing units including washing,embroidery and printing facilities.The list is updated regularly and was last updated on April 3,2023.In FY23,we worked with 408 active Tier 1 factories across 30 countries,covering 95%of our business across all categories.In addition to finished goods factories,we continued to disclose Tier 1 processing units.We had 183 active processing units for Finished Goods factories.Overall,FY23 disclosures included 88%of factory coverage.HIGHLIGHTS OF OUR BETTER BUYING INSTITUTE SURVEY 72%of suppliers(on par with industry average)see Ralph Lauren as a partner in business growth.The suppliers who joined the survey cover 78%of value and 73%of unit volume in the business.Based on our suppliers feedback,we will continue to focus on planning and forecasting,sourcing and order management,and win-win sustainable partnership.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|28CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWIn FY23,we also ran a pilot with Sourcemap,which invites suppliers to engage in and cascade surveys deeper into the supply chain to uncover detailed supplier connections as well as production capabilities,labor conditions and environmental performance.Learnings from this work are informing future development of our vendor management systems,our approach to identifying supply risks and opportunities,and our ability to increase engagement on sustainability and citizenship performance.Please see the Climate section for more information about how we are engaging with Tier 2 mills on decarbonization,as an example.Traceability:Verifying Connections Across the Value ChainTracking products and their inputs across the value chain from source to shelf has become mandatory for some commodities and is emerging as a regulatory requirement globally.This is possible through digital traceability(e.g.chain of custody)and physical traceability(e.g.trackers).It also supports our efforts to achieve 100%sustainably sourced key materials(as described in the Sustainable Materials section of this report).In FY23,we rolled out a Traceability Playbook to suppliers to communicate our expectations around chain of custody documentation and to provide support and training on this topic.We also conducted several pilots to test technologies to support our traceability efforts.TIER 1 SUPPLIERSTIER 2 SUPPLIERSTIER 3 SUPPLIERSTIER 4 SUPPLIERSFinished goods manufacturers and value-adding processes such as washing,embroidery and printingMaterial production(mills,weaving,knitting,dye houses and washing facilities,sundry suppliers,tanneries,outsole manufacturers,embroiderers,screen printers,trim suppliers,etc.and packaging suppliers)Raw material processing (spinning yarn production)Raw material source/feedstock production(farms,ginning,forestry,extraction)2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|29CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWTEXTILE GENESISRalph Lauren engaged in pilots with the traceability platform Textile Genesis to better understand the potential to leverage this kind of technology in our value chain.Textile Genesis is a digital platform that enables users to trace materials from source to finished goods using digital-tokens-based traceability.Our focus for the pilots was recycled polyester validation using Textile Exchanges Global Recycled Standard,and U.S.cotton tracked through the Trust Protocols proprietary platform.From these pilots,we gleaned valuable lessons in the following areas:supplier onboarding processes,use cases for transaction mapping and documentation verification capabilities for sustainable materials,all of which are being leveraged as we continue to partner across our value chain to advance transparency and traceability.Fibretrace Our pilot with Fibretrace leveraged the companys tracker technology to create key chain of custody links across portions of the supply chain for our Origin Polo,introduced in February 2023.The product is made from cotton grown by farmers transitioning to more sustainable practices,including the use of bio-based agricultural inputs.In FY24,we intend to explore other chain of custody tracker technologies as well.OritainOne of the main focus areas for our industry is creating visibility into the country of origin for key materials,such as cotton.This year,we extended our partnership with Oritain to provide country of origin verification testing on select fabrics and products.These tests provide an added layer of confirmation to our traceability documentation efforts.Looking AheadExpectations for greater transparency and traceability in supply chains and products are increasing from regulators and consumers alike.Developing this visibility requires a new way of operating that presents challenges for our entire industry but also unlocks opportunities for us to drive positive impact and increase resilience and agility across our value chain.We are working towards establishing a comprehensive long-term Transparency&Traceability strategy and approach,incorporating the lessons learned from our piloting efforts thus far.A key component of this work will include leveraging technology in an accessible way that reflects the diversity across our value chain and enables us to make progress in this critical area.30CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWBeyond creating products more responsibly,we are working to operate in ways that respect our planet,such as using renewable energy,managing our waste properly and using water responsibly.By adopting practices that help preserve the worlds natural resources,we can be stewards in protecting our environment for generations to come.Protectthe EnvironmentEXPLORE THIS SECTION31 CLIMATE36 WATER STEWARDSHIP38 WASTE MANAGEMENT 40 CHEMICAL MANAGEMENT42 BIODIVERSITY 2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|31CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWA Target for Net ZeroOur commitment to lowering our emissions is aligned with the urgency required to limit global temperature rise to 1.5C in accordance with the goal of the United Nations Framework Convention on Climate Change.The Science Based Targets Initiative(SBTi)has developed standards for translating this urgency into corporate targets.We have received SBTi approval for our 2030 GHG reduction target and have submitted our net zero target for SBTi approval against their Net-Zero Standard.Our Climate StrategyAs we develop and refine our roadmap to achieving net zero by 2040,we have defined key strategies for reducing GHG emissions across our own operations and supply chain.To implement these strategies,we establish partnerships and engage on policy issues to accelerate low carbon practices in our industry.Our Net Zero Commitment Statement further details how we will achieve these targets.ClimateWe are in a climate crisis,one that requires us all to make significant reductions to global greenhouse gas(GHG)emissions so we can protect and preserve our planet.That is why we have created an ambitious roadmap with bold near-term and long-term targets to reduce absolute GHG emissions across our operations and value chain.Achieving and maintaining our target of sourcing 100%renewable electricity at our facilities.KEY DECARBONIZATION STRATEGIESIncreasing the share of low-carbon materials in our products(e.g.,recycled fiber or regenerative cotton farming practices).Expanding and accelerating decarbonization practices with our product manufacturing suppliers,including supplier GHG reduction roadmap development and coal phase-out.Prioritizing ocean freight and minimizing air freight to transport our products.Investing in our circularity strategy.Working with partners and action networks for industry-wide change.2040 GOAL Achieve net zero GHG emissions across the value chain from a FY20 base year2030 GOAL Reduce absolute Scope 1,2 and 3 GHG emissions by 30%from a FY20 base year2025 GOAL Power our owned and operated offices,distribution centers and stores with 100%renewable electricity2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|32CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWWe work to address GHG emissions in both our own operations over which we have the most direct control and in our supply chain,which contributes to the majority of our emissions.We also participate in industry collaborations including United Nations Fashion Industry Charter for Climate Action,the Sustainable Apparel Coalition,G7 Fashion Pact,Clean Energy Buyers Alliance and RE100,among others.These collaborations help to bring together expertise to inform targeted corporate actions for decarbonization,including the transition to renewable energy across our supply chains and growing the circular economy.4 We measure and calculate our emissions according to the World Resources Institute Greenhouse Gas Protocol,the industry standard and international tool for carbon accounting.For a more detailed methodology,see our ESG Supplement.CARBON FOOTPRINT(SCOPE 1,2 AND 3)(MTCO2e)4FY23FY22FY21FY20 Total Emissions1,317,3481,273,1221,237,0171,861,736Scope 1 Emissions 12,20611,58214,66116,248Scope 2 Emissions62,38169,29178,30590,380Scope 3 Emissions1,242,7611,192,2491,144,0311,755,107GHG Intensity(MTCO2e/$million revenue)204.44204.73281.09 302.24Emissions Progress Our absolute emissions decreased by 29%in FY23 from our FY20 baseline.This reduction is driven by production volumes decreasing by 33%compared to FY20,which contributed significantly to our Scope 3 emissions from manufacturing and raw materials.Other factors that contribute to this change in emissions include:reductions in air freight usage from FY22 levels;a shift in business travel practices;and regular improvements to our carbon footprint methodology consistent with carbon accounting best practices.Specifically,we have made significant improvements around how we collect more comprehensive data from suppliers to better reflect our manufacturing practices in our supply chain.1 Percentages may not add up to 100 due to rounding.2 Consumer Product Use includes emissions from product washing,drying,dry cleaning and/or ironing.3 Other Value Chain includes upstream energy production,waste generated in operations and licensed stores.1%Heating and Cooling5%Purchased Electricity11%Manufacturing&Processing(Tier 1)18%Manufacturing&Processing(Tier 2)23%Raw Materials16%Consumer Product Use21%Product End of Life13%Non-Merchandise Spend6%Transportation&Distribution 2%Business Travel&Employee Commuting3%Other Value Chain3FY23 GHG FOOTPRINT OVERVIEW:SCOPE 1,2,31 MTCO2EScope 1:Heating&Cooling(1%)Scope 2:Purchased Electricity(5%)Scope 3:Value Chain(94%)2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|33CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWRenewable Energy in Our OperationsIn recent years,increased demand for renewable energy and disruptions in the supply chain have led to sourcing challenges in the renewable energy marketplace.As we continue to pursue projects that will help us meet our 2025 renewable energy target and bring additional renewable electricity to the grid,we have navigated these challenges by working closely with renewable energy developers,expanding our sourcing to additional grid regions,and evaluating alternative contract and financing arrangements.In FY23,we made progress sourcing virtual power purchase agreements(VPPAs)for our electricity consumption in North America and Europe.In North America,we are pursuing multiple projects that will result in new solar electricity generation in the grid and will collectively match the electricity we consume annually in the United States and Canada.In Europe,we are participating in the Fashion Pacts collective virtual power purchase agreement(CVPPA)initiative.We are partnering with 11 other fashion companies to aggregate our electricity demand in Europe and sign a long-term agreement adding new renewable energy capacity to the grid.We anticipate that this agreement will match most of the electricity we consume annually in Europe.LED Lighting in our Distribution CentersWe are in the process of switching all the lighting equipment in our two largest North Carolina distribution center facilities from fluorescent to energy efficient LED lighting.When completed in FY24,the new lighting will decrease our annual electricity use in these facilities by 70%and avoid 6,300 lbs of fluorescent light waste each year.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|34CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWAddressing Emissions in Our Supply Chain A significant portion of our emissions comes from our supply chain,so we work with suppliers to set and implement goals and plans to reduce their carbon footprint.The Carbon Leadership ProgramIn FY23,we continued our partnership with the Apparel Impact Institute to roll out the Carbon Leadership Program within our supply chain.We refreshed our supply chain carbon emissions analysis to incorporate the emissions reduction targets and roadmaps developed in collaboration with our suppliers in the first cohort in FY22.We also continued to identify priority facilities and develop decarbonization roadmaps for each.Through the Program,we invested in expert technical support for each manufacturing facility to develop their 2025 and 2030 carbon and water reduction plans in alignment with broader industry ambitions and best practices.We also worked closely with our suppliers to track progress and support capability building and collective action programs.We plan to continue expanding the program in our supply chain.Accelerating Coal Elimination in our Supply ChainCoal is one of the most carbon intensive energy sources in the manufacturing industry and therefore a crucial factor in our supply chain decarbonization pathway.We aim to eliminate the use of coal in our supply chain as soon as possible.In FY23,we launched our accelerated roadmap to eliminate coal in our supply chain:Beginning in November 2022,we no longer onboarded new manufacturing facilities with on-site coal usage.As of December 2022,existing suppliers and facilities with known on-site coal consumption were required to submit a concrete commitment to eliminate coal usage by 2025.Coal-attributed emissions represent an estimated 31%of our manufacturing carbon footprint.In FY23,we analyzed the usage of coal in our supply base,making use of the data collected through the third-party-verified Higg Index Facility Environmental Module as well as our internal platform.As of March 2023,we identified 61 active Tier 1,Tier 2 and sub-contracted facilities that have on-site coal usage.So far,50 have committed to eliminate their coal usage by 2025.We continue to engage with our partners to monitor their progress.CARBON LEADERSHIP PROGRAM PROGRESSWe expanded our roll out of the Carbon Leadership Program to cover 48 facilities,representing approximately 47%of our raw material business spend,and 19 strategic finished goods facilities.Nominated facilities set carbon reduction targets between 14%and 80%by 2030 against their 2019 baseline.The average reduction targets committed by all the nominated facilities so far is 59%.Based on the roadmaps developed by the nominated facilities,an aggregated savings estimation of 1,792,905 tons of CO2 equivalent annually has been identified.SUPPLIER DECARBONIZATION Roadmaps developed under the Carbon Leadership Program are recommended by experts based on each facility and may include:Energy efficiency improvements Renewable energy implementation Water efficiency improvements Coal elimination 2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|35CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWAs a signatory to the United Nations Framework Convention on Climate Change(UNFCCC)Fashion Industry Charter for Climate Action(FICCA),we are working to identify opportunities to accelerate the elimination of coal across our industry.We continue to monitor the evolving infrastructure and policy developments in our sourcing geographies,while collaborating closely with our peers and partners in the industry to drive action on coal elimination in our shared supply chains.Integrated Circularity and Sustainable Materials Our ongoing commitments to create timeless,circular products and to use materials with reduced environmental impact are critical to reducing emissions in our value chain.Progress toward our targets(offering high-quality products made with 100%recycled cotton and increasing the share of sustainably-sourced key materials)will contribute to reductions in our Scope 3 footprint.For more information,see the Integrated Circularity and Sustainable Materials sections of this report.Transportation and Distribution Our Scope 3 footprint includes emissions from product transport such as train,ocean,air and truck freight.To mitigate cost and environmental impact,we prioritize efficiency when choosing how to transport products to our distribution centers.We only allow vendors to deliver products by air in rare circumstances,such as when production does not meet delivery deadlines and there is a risk to keeping our promise to our customers.Our logistics provider selection process continues to include and consider candidates sustainability practices from the presence of existing company sustainability strategy to working with some parcel carriers to develop performance measurement and continuous improvement plans.We are also signatories to the Ocean Conservancys Arctic Corporate Shipping Pledge,committing us to not hire carriers to ship our products through Arctic Trans-Shipment Routes.In FY23,air freight managed directly by Ralph Lauren was 7.6%compared with 14.5%in FY22.This decrease was due to ongoing improvements in our buying practices and a decrease in time constraints linked to factory closures,ocean shipping congestion and pandemic-related port delays.In FY23,vendor-managed air accounted for 3.8%of total shipments,compared with 6.3%in FY22.CLIMATE RISK We consider climate as part of enterprise risk management and business planning.In FY23,we conducted a preliminary scenario analysis for physical climate risk and climate policy risk.A cross-functional Climate Risk Task Force meets semi-annually to identify and describe key climate risks,communicate them to key stakeholders including our leadership team and our Board of Directors and ensure prevention and mitigation actions are taken.We align our climate risk disclosures with the recommendations of the Task Force on Climate-Related Financial Disclosures(TCFD).Read more about our programs to assess and manage climate change risks in our CDP 2022 Climate Change Disclosure and TCFD Index.AIR FREIGHTFY23FY22FY21FY20 Air Freight(%of shipments)7.6.5%6.7%3.8 23 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|36CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Water Stewardship Approach Water is critical for communities and ecosystems to thrive and is also an essential resource for our business.Our industry depends on water,from irrigation for fiber crop cultivation to dyeing and washing processes in manufacturing to management of our owned and operated facilities.As a result,we look to conserve water in our operations,protect its sources,responsibly manage wastewater and help improve community access to this fundamental resource.Water StewardshipWe are committed to reducing water consumption across our value chain,and safeguarding and improving access to water resources in our communities.Achieve at least a 20%reduction in total water use across our operations and value chain,compared to a FY20 baseline 2025 GOALWater Stewardship in Our Supply ChainIn FY23,we began working with a third-party expert to analyze water hotspots in our supply chain and identify priority areas for improving water use practices in manufacturing and production.In parallel,we continued our direct collaboration with suppliers to improve water management through the adoption of more water-efficient processing for our materials and product manufacturing.In FY23,these transitions helped our suppliers avoid over 240,000 cubic meters of water use.Furthermore,we continued to expand our support to help our partners set facility-level water reduction targets through the Carbon Leadership Program.Through the program,nominated facilities set 2025 and 2030 water reduction targets ranging up to 100%.Based on the roadmaps developed by the nominated facilities,an aggregated saving estimation of 17 million cubic meters of water annually has been identified.TOTAL OPERATIONAL WATER USE BY FACILITY TYPETotal Facility Water Use:314,415 m365%Retail23%Office11%Distribution CenterWATER FOOTPRINTFY23FY22FY21FY20 Manufacturing&Processing10,836,188 m3(97%)11,087,765 m3(98%)9,661,765 m3(97%)14,573,646 m3 (98%)Owned&Operated Facilities314,415 m3(3%)263,541 m3(2%)253,000 m3(3%)296,669 m3(2%)Total11,150,603 m311,351,306 m39,914,765 m314,870,315 m32023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|37CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWImproving Watershed HealthAddressing water challenges across our value chain goes beyond water use in manufacturing,which is why our approach to water stewardship includes engaging in joint efforts to improve water management at scale.Through our ongoing partnership with World Wildlife Fund(WWF),we have conducted a comprehensive water risk analysis,enabling us to identify water-stressed basins in our supply chain and prioritize action and investment to improve watershed health in those locations.In FY23,we continued our participation in WWFs Noyyal-Bhavani Collective Action Program.This program is focused on ensuring that,by 2030,the Noyyal and Bhavani sub-basins of the Cauvery River in Southern India are healthy ecosystems that ensure water security for people and nature.In addition to addressing regional textile industry impacts on freshwater,the program also focuses on improving farming water management practices,protecting freshwater biodiversity and clearing of invasive species that harm water systems.In 2022,13 textile wet processing facilities joined the program and were evaluated for potential water management improvement opportunities and provided with recommendation plans.Through the implementation of these improvement opportunities,the 13 sites saved a total of more than 114,330 cubic meters of water in 2022.Supporting Water AccessSafe drinking water is the most primary of human needs,yet worldwide,one in three people do not have access to this vital resource.To help end this disparity,we support organizations providing clean water for those in need.Since 2018,the Company has been working with GiveMeTap to provide drinking water sources in rural communities in the Upper West Region of Ghana.In 2023,we funded nine water pumps for a total of 43 pumps,which will improve safe water access to approximately 43,000 people since our partnership began.We are also proud to expand our goal to fund 100 pumps by 2026.The Ralph Lauren Corporate Foundation has also made several commitments to improve access to clean water around the world,as well as sanitation and hygiene.More information on the Foundation and Company efforts can be found in the Community Engagement&Philanthropy section of this report.TOTAL SUPPLY CHAIN WATER USE BY SOURCE55.07%Municipal23.03%Groundwater10.85%Produced/Processed Water9.32%Surface Water1.57%General or Unknown Origin0.08%Rainwater0.08%Wastewater from Another OrganizationSUPPLY CHAIN WATER USE BY FACILITY TYPE2,856,513 m3(26%)Tier 1 Factory2,617,338 m3(24%)Tier 1 Subcontractor5,362,337 m3(50%)Tier 2 Fabric Mill2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|38CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Waste Management ApproachPart of conserving natural resources is managing waste in a responsible way.We work to minimize waste in our operations and divert waste from landfill and incineration to donation,reuse and recycling.Our goal is continued improvement as we incorporate zero waste principles throughout our business practices.In Our Distribution CentersWe are proud to have diverted 92%of waste from landfill and incineration across our distribution centers,meeting the Zero Waste International Alliance definition of zero waste1.Many efforts contributed to this milestone,including the FY23 installation of balers at two of our distribution centers to increase plastic recycling and the addition and expansion of partnerships with textile recyclers.We will continue to maintain this minimum diversion level and seek ongoing improvements in waste diversion and reduction at all facilities.In Corporate OfficesWe are continually working to identify actions we can take in our corporate offices that contribute to waste reduction and diversion.For example,we have an ongoing partnership with FABSCRAP to recycle and reuse sample fabric,leading to more than 12,000 pounds of fabric diverted from landfill in 2022.In the last year,we discontinued use of individual product polybags for sales and design samples in the U.S.and Asia Pacific regions and are exploring options to expand this practice to Europe in FY24.Also in FY23,we introduced organic waste collection for composting at our corporate headquarters in New York City.In Manufacturing In 2022,we partnered with Queen of Raw,a global textile marketplace,to address fabric waste in production in two key sourcing countries:China and Vietnam.Working with our suppliers and Queen of Raws global network of recyclers,we were able to divert 11.8 metric tons of unused materials from landfill.We are exploring options to further expand this initiative to other countries in FY24.Waste ManagementWe are committed to reducing waste at its source and diverting waste from landfill through recycling and reuse.2025 GOAL Achieve 100%recyclable,reusable or sustainably sourced packaging materials.2023 GOAL Achieve zero waste to landfill across our distribution centers.11 Using the Zero Waste International Alliance definition of zero waste,we will divert more than 90%of the waste generated at our distribution centers from landfill and incineration.92%of waste diverted from landfill and incineration across our distribution centers to achieve our zero waste goal.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|39CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWIn Our PackagingWe consider packaging a component of the product and,as with all our products,we are working toward using materials that reduce environmental impact and minimize waste.In FY23,we were able to make significant progress toward our goal of packaging material sustainability with a full transition to polybags with 100%recycled content from all key suppliers.We also began pilot testing paper-based alternatives to polybags and polymailers for initial adoption in North American Polo Outlet Stores and e-commerce,respectively.73%of our total packaging volume met at least one of our sustainable packaging criteria in the fiscal year.On RalphL,we offer a reduced packaging option that gives consumers the ability to remove plastic or paper inserts,hangers,garment bags,promotional materials and paper invoices from their orders.In FY23,we continued to remove and recycle all of the polybags from reduced packaging orders,which represented approximately 9%of all orders placed in North America through RalphL.Managing Excess InventorySince being introduced in 2020,we have continued to use our Excess Inventory Management Principles to guide our approach for limiting excess inventory and maximizing waste diversion.In FY23,we launched our Fabric First Initiative,decreasing lead times in production and allowing us to keep our orders as close as possible to market demand.We also continued to prevent excess by decreasing the amount of product purchased specifically for sale at Polo Outlet Stores and increasing the amount of product originally offered through other channels(e.g.,wholesale)for sale at Polo Outlet Stores.We are committed to identifying and applying sustainable options for managing excess and damaged product.In the past year,we have continued to increase diversion of excess inventory with new and expanded recycling and donation partnerships globally.1 Comprehensive site-specific waste data was not available for all offices and stores.Waste data was modeled for these sites.Prevent Excess at SourceMOST PREFERREDLEAST PREFERREDPursue Expanded Sales ChannelsMaximize Product or Materials Next LifeDonate for Positive ImpactRecycleDisposeWASTE GENERATED AT OUR FACILITIESMETRIC TONSDIVERSION RATEDistribution Centers 8,08692%Stores12,36082%Offices127835%Total10,72488%OUR EXCESS INVENTORY MANAGEMENT PRINCIPLES2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|40CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Chemical Management ApproachWe take responsibility for ensuring that the chemicals used to make our products are safe for people and the environment.Our Sustainable Chemical Management Policy outlines our approach to assessing the impacts of the chemicals in our supply chain and partnering with our manufacturers on responsible chemical management practices.Zero Discharge of Hazardous Chemicals Programme Ralph Lauren is a partner in the Zero Discharge of Hazardous Chemicals(ZDHC)Programme,a cross-sector coalition aimed at advancing the industry toward zero discharge of hazardous chemicals.Through this partnership,we collaborate with peers and experts to eliminate the use and discharge of these chemicals across our apparel supply chain.We adopt the ZDHC Manufacturing Restricted Substances List(MRSL)and ZDHC-approved Chemical Inventory List Management Tools to enable our suppliers to track and report on all chemicals used in the creation of our products,and prioritize the substitution of harmful chemicals with MRSL-conformant,safer alternatives.The industrys collective work in sustainable chemicals management as well as the MRSL continue to evolve as new materials,safer and more sustainable alternatives,chemical testing,tools and technologies continue to develop over time.We are advancing toward the full elimination of hazardous chemicals in our global supply chain,and we are committed to continuing to do so as our industry evolves.In FY23,we continued to expand our visibility into chemical products used in our manufacturing supply chain,as well as their conformance status with the MRSL,specifically in Tier 1 manufacturing facilities that represent 79%of our business spend,compared to 72%last year.Of the chemicals reported,84%conform with the MRSL.In our Tier 2 supply chain,we have chemical visibility on 52%of our woven,knit and sweater material business spend.Additionally,86%of the chemicals reported conform with the MRSL.We are working closely with suppliers to achieve full MRSL conformance by 2025 and beyond.In addition to the chemical transparency and MRSL conformance,we continued to assess the operational aspect of chemical management at the facility level through the Chemical Management section in the Higg Index Facility Environmental Module(FEM).Our Tier 1,Tier 2 suppliers and subcontracted facilities scored an average 31,39 and 31 points in the Chemical Management section,respectively.Chemical ManagementWe monitor and reduce hazardous chemical use and discharge to meet our goal to eliminate hazardous chemicals from our product manufacturing and supply chain.2025 GOAL Eliminate the use of hazardous chemicals in our supply chain2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|41CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWAligned with the ZDHC approach to confirm that MRSL substances are not intentionally used,we require manufacturing facilities with wet processing to test their wastewater output against the ZDHC Wastewater Guidelines and share results on the ZDHC Gateway portal.Among our facilities,66%of Tier 1 and 56%of Tier 2(by business spend)have performed wastewater tests in accordance with the Guidelines;of these 83%comply with the ZDHC requirement,with 99.8%of the substances screened compliant with the ZDHC standard.Chemical VerificationIn FY23,we continued to work closely with multiple ZDHC-approved chemical inventory list management tool providers to increase the adoption of disclosure tools and to ensure that data quality and accuracy are high.We are also exploring an industry-aligned methodology to validate the chemical data reported from our suppliers manufacturing sites.In FY24,we plan to pilot test the methodology with our top wet processors globally.Elimination of Priority ChemicalsFor the last few years,we have focused on eliminating priority,harmful chemicals.We successfully transitioned all our water repellent fabrics to non-PFAS materials in FY23.Also,we no longer develop materials or products with intentionally added PFAS or PVC materials.Additionally,PFAS has been incorporated into our product testing manual to ensure product compliance with the MRSL standard.We are on track to phase out all Potassium Permanganate from denim by 2025,and plan to expand this to non-denim products.Alternative Washes We are building on the progress on our denim washes with other woven and knit products where it is challenging to get an authentic vintage look without the use of the chemicals we seek to eliminate.Our teams are working collaboratively to identify alternative washes that are suitable for our other woven and knit materials,while maintaining our quality standards and desired aesthetic.We are also dependent upon the scaled availability of safer alternative chemicals that are suitable for other woven and knit applications.As such,we continue to support engagements with chemical providers through the ZDHC to raise awareness on the demands for safer alternatives.RALPH LAUREN CURRENTLY BANS THE INTENTIONAL USE OF:PFAS(Per-and polyfluoroalkyl substances)from water repellent/resistant fabricsPVC(Polyvinyl chloride)from all our finished products,materials and packagingPP(Potassium Permanganate)from our denim washes2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|42CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWProtecting BiodiversityNature provides people and businesses like ours with critical resources such as freshwater,food and essential raw materials.The dual crises of climate change and biodiversity loss are closely intertwined.As ecosystems and species are increasingly threatened,Ralph Lauren is committed to leveraging science to build an in-depth understanding of our current impacts on biodiversity by:Identifying ways to avoid new negative impacts and reduce existing ones where possible Developing strategies to restore and regenerate ecosystems in our value chain Identifying opportunities to engage in transformative,systems-level efforts to address drivers of nature lossOn our path to setting goals in alignment with the Science Based Targets for Nature,we have established initiatives that address many aspects of the target areas identified in the initial guidance.We are actively engaging with The Fashion Pacts biodiversity pillar,which is focused on supporting members with developing biodiversity strategies aligned with the Science Based Targets for Nature and identifying pathways for reducing nature impacts of key materials such as leather and cashmere.BiodiversityBiodiversity is essential for the health of people,the environment and the economy.We work to reduce our impact on nature and protect and restore the ecosystems our supply chain relies on.2024 GOAL Develop a biodiversity strategy and set goals aligned with the Science Based Targets for Nature by 2024Supporting Nature-Related TransparencyWe believe transparency is an important aspect of addressing biodiversity loss at a global scale and recognize the role that business must play to mitigate negative impacts on nature.That is why,ahead of the UN Biodiversity Conference in Montreal in December 2022,Ralph Lauren joined more than 400 business and finance institutions in signing onto the#MakeItMandatory campaign.The campaign urged heads of state to adopt a requirement for large businesses and financial institutions to assess and disclose their risks,impacts and dependencies on biodiversity by 2030 as part of the Global Biodiversity Framework.2023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|43CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCombating DeforestationDeforestation and land conversion are key drivers of biodiversity and habitat loss.For the second year,we invested in Impact Partnership Incentives(through Textile Exchange),which directly supports Produzindo Certo,an on-the-ground organization working with cattle farms in Brazil.It seeks to improve their practices to achieve animal welfare certification and have their farms third-party verified as Deforestation/Conversion-Free within three years.We have also continued our engagement in the Leather Working Groups deforestation working group.Advancing Our Strategy We have engaged Quantis,a leading environmental sustainability consultancy,to conduct a formal assessment of our nature-related impacts and dependencies,to inform development of a comprehensive biodiversity strategy in FY24.As part of this process,we will map our current sustainability goals and initiatives against these impact and dependency areas and prepare for disclosure informed by the Task Force for Nature-Related Financial Disclosure(TNFD)framework,which is expected to be released in 2023.CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWCreating a business that is timeless and has a positive impact on the world means ensuring that the people who move us forward are included,respected and empowered.Thats why were committed to supporting the people in our workforce,throughout our supply chain and in the communities we serve.ChampionBetter LivesEXPLORE THIS SECTION45 DIVERSITY,EQUITY&INCLUSION55 EMPLOYEE WELL-BEING58 COMMUNITY ENGAGEMENT&PHILANTHROPY 71 RIGHTS&EMPOWERMENT IN THE SUPPLY CHAIN 442023 GLOBAL CITIZENSHIP&SUSTAINABILITY REPORT|45CREATE WITH INTENTPROTECT THE ENVIRONMENTCHAMPION BETTER LIVESGOVERNANCE2023 ESG SUPPLEMENT INTRODUCTION&OVERVIEWOur Diversity,Equity&Inclusion ApproachOur Diversity,Equity&Inclusion(DE&I)strategy is designed to create a culture of belonging,attract and retain diverse talent and offer opportunities that enable all people to thrive.While we remain grounded in our American roots,our reach is global and our DE&I approach recognizes that diverse experiences and global perspectives help us authentically engage our employees and communities around the world.We have organized our approach to integrating DE&I into our business under three strategic pillars talent,engagement and education to create career pathways for diverse talent,amplify all voices in our community and build DE&I competencies across our organization.Diversity,Equity&InclusionAt Ralph Lauren,our Purpose to inspire the dream of a better life for all drives us to deliver a culture of diversity,equity,inclusion and belonging inside our Company and throughout the communities we serve.STRATEGIC PILLARSTALENTENGAGEMENTEDUCATION Cultivate diverse teams Ensure that fostering a culture of inclusion and belonging is a priority enterprise-wide Elevate diverse talent into leadership ranks Enable open dialogue by amplifying all voices,emphasizing psychological safety through cultural awareness events and structured programming Establish and deploy structured DE&I education with an emphasis on accountability for people leaders Advocate for equitable access to education for allONGOING GOAL Maintain gender parity with equal representation in leadership positions at the VP level and aboveFY23 GOAL Ensure at least 20%of our Global Leadership Team is composed of racially and ethnically diverse talent2023 GLOBAL CITIZENSHI
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FY 2022 ESG Investor Presentation 15 February 2023ContentsOur strategy and ESG progress 3 9Climate and sustainability 10 28Social 2935Governance 3641See slide 42 for where to find further information on ESG at Barclays Our strategy and ESG progress4|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Our Purposeinfluence our strategyand our ValuesFulfilling our Purposedelivered through Group synergiescreating positive outcomes for our stakeholdersCustomers and Customers and clientsclientsWe deploy finance responsibly to support people and businesses,acting with empathy and integrity,championing innovation and sustainability,for the common good and the long termColleaguesColleaguesSocietySocietyInvestorsInvestorsWe work as one organisation to create synergies and deliver greater valueRespectRespectIntegrityIntegrityServiceServiceExcellenceExcellenceStewardshipStewardshipOur diversification,built to deliver double-digit returnsStrategic priorities to sustain and grow5|Barclays FY 2022 ESG Investor Presentation|15 February 2023 ESG has been an ongoing focus for BarclaysPrePre-20162016201620162017201720182018Joined the Paris Pledge for ActionLaunched LifeSkillsLaunched the Barclays Way our Code of ConductBegan working with Carbon Disclosure Project(CDP)to calculate supply chain emissions from top 39 suppliersLaunched Unreasonable ImpactPublished Human Rights statementFounding signatory of the HM Treasury Women in Leadership CharterSustainable Finance Framework developedSigned statement of support of the Financial Stability Boards Taskforce on Climate-related Financial Disclosures(TCFD)Published first Group Statement on Modern SlaveryOne of the first mainstream UK banks to launch a“Green Home Mortgage”E EE EE ES SE ES SS SS SG GE ES S201920192020202020212021Joined Paris Agreement Capital Transition Assessment(PACTA)pilotFounding signatory of the Principles for Responsible Banking(PRB)Announced ambition to be a net zero bank by 2050Launched BlueTrackTMto measure/track our financed emissionsSet 2025 targets for Energy and PowerIncreased green financing target to 100bn and launched 175m principal investment initiative in green innovationProposed our own climate change shareholder resolutionLaunched 100m COVID-19 Community Aid PackageImplemented a 12-point Race at Work(RaW)action plan,opening up opportunities to attract,develop and add to our Black talentGroup ExCoposition created for Group Head of Public Policy&Corporate ResponsibilityFounding member of the Net-Zero Banking Alliance(NZBA),part of the Glasgow Financial Alliance for Net Zero(GFANZ)Joined the Get Nature Positive Commitment and Taskforce on Nature-related Financial Disclosures(TNFD)ForumIntroduced socio-economic inclusion as our sixth Diversity,Equity and Inclusion(DEI)agendaDefined measurable outcomes to track progress against our RaWaction plan,through our RaWambitionsLaunched our updated Purpose,Values and MindsetE ES SG GE ES SE EE ES SS SG GE EE EE EE EE E6|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Brought forward part of the 2023 pay increase,awarding 35,000 UKawarding 35,000 UK-based junior colleagues a 1,200 salary based junior colleagues a 1,200 salary increase increase effective from effective from August August 20222022 Introduced Equity Introduced Equity into our DEI strategy and set out five DEI prioritiesset out five DEI priorities Cost Cost of living support:Proactively contacted 13.5m customers in 2022 of living support:Proactively contacted 13.5m customers in 2022 with targeted emails based on their financial needs,providing support and guidance on managing their finances Exceeded LifeSkillsprogramme commitments upskilled 12.6m people upskilled 12.6m people from 2018 to 2022 and placed placed 270,600 people into work 270,600 people into work from 2019 to 2022 Exceeded Unreasonable Impact commitment supported 269 growthsupported 269 growth-stage ventures stage ventures solving social and environmental challenges since 2016 Sourced 100%renewable electricity for our operationsSourced 100%renewable electricity for our operations1 1and created a pathway to address our supply chain emissions Extended assessment of our financed emissions to six sectors,Extended assessment of our financed emissions to six sectors,adding Automotive Manufacturing and Residential Real Estate,and announced accelerated phaseannounced accelerated phase-out for coalout for coal-fired power generationfired power generation On track to deliver against 100bn green financing target well ahead of 2030 deadline and announced new$1tn announced new$1tn Sustainable and Transition financing targetSustainable and Transition financing targetand upsized Sustainable Impact Capital target to 500mupsized Sustainable Impact Capital target to 500m Developing Developing Client Transition Framework Client Transition Framework to evaluate our clients current and expected progress as they transition to a low-carbon economyand we continued to advance our ESG agenda in 20221Global real estate portfolio operations which includes offices,branches,campuses and data centres|Fully integrated our TCFD report into Fully integrated our TCFD report into Barclays PLCs 2022 Barclays PLCs 2022 Annual Annual ReportReport Updated Sustainable Finance Framework Updated Sustainable Finance Framework which will support new$1tn Sustainable and Transition financing target Held Say on Climate advisory vote at 2022 AGMHeld Say on Climate advisory vote at 2022 AGM;shareholders approved“Barclays Climate Strategy,Targets and Progress 2022”Climate risk became a Principal Risk Climate risk became a Principal Risk at the start of 20227|Barclays FY 2022 ESG Investor Presentation|15 February 2023 -86%2-91%,3,3We measure our progress against key metrics and targets(1/2)2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Cumulative change|2Based on 12 months of consumption from 1 October 2020 to 30 September 2021 compared to 2018 baseline|3Based on 12 months of consumption from 1 October 2021 to 30 September 2022 compared to 2018 baseline|4FY22 capital markets financing figures are based on Dealogicdata as of 13 January 2022.As data on deals is confirmed throughout the year,these numbers may be subject to changes|Operational Operational footprintfootprintFinancing&Financing&InvestmentInvestmentEnvironmentEnvironmentTarget(s)as at FY22Target(s)as at FY22FY22 FY22 performanceperformance1 1Social,environmental and sustainabilitySocial,environmental and sustainability-linked financing facilitatedlinked financing facilitatedGreen financing facilitatedGreen financing facilitatedSustainable Impact Sustainable Impact CapitalCapitalGHG emissions Scope GHG emissions Scope 1 and 2(1 and 2(marketmarket-basedbased)reduction against)reduction against 2018 baseline2018 baselineEnergy(against 2020 baseline)Energy(against 2020 baseline)150bn(2018 2025)100bn(2018 2030)500m(2020 2027)-90%(2025)-15%(2025)-40%(2030)247.6bn247.6bn,4 487.8bn87.8bn,4 489m89m-322%FY21 FY21 performanceperformance1 1193bn62bn54m-22%MetricMetricFinancedFinancedemissions emissions reductionreductionPower(against 2020 baseline)Power(against 2020 baseline)Cement(against 2021 baseline)Cement(against 2021 baseline)Steel(against 2021 baseline)Steel(against 2021 baseline)Source 100%renewable electricity for our Source 100%renewable electricity for our global real estate portfolioglobal real estate portfolioCategoryCategory-30%(2025)-50%to-69%(2030)-20%to-26%(2030)-20%to-40%(2030)100%(2025)1000%-8%n/an/a-9%9%-2%2%-11%8|Barclays FY 2022 ESG Investor Presentation|15 February 2023 327)(%We measure our progress against key metrics and targets(2/2)2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Benchmark|2Care tNPSprovides an accurate measure of customer sentiment across our Fraud,Dispute,Credit and Care channels and replaces the relationship NPS reported in the 2021 Annual Report|3BUK total complaints YoY move was-18%in 2022 and-23%in 2021|4Cumulative figures|5As set out in the updated Board Diversity Policy adopted on 15 December 2022.Refer to pages 161-162 of Barclays PLC 2022 Annual Report for further details|6Group Finance Director|7Aligned with the Parker Review on the ethnic diversity of UK Boards|ColleaguesColleaguesBoard Board compositioncompositionSocialSocialTarget(s)/benchmark Target(s)/benchmark as at FY22as at FY22FY22 FY22 performanceperformanceFY21 FY21 performanceperformanceMetricMetricCommunitiesCommunitiesCategoryCategoryGovernanceGovernanceExCoExCocompositioncompositionFemales at Managing Females at Managing Director/Director Director/Director levellevelColleague engagementColleague engagementLifeSkillsLifeSkills Number of people upskilledNumber of people upskilledFemales on the BoardFemales on the BoardEthnically diverse members of the BoardEthnically diverse members of the BoardFemale Female Group Group ExCoExCoand and ExCoExCodirect reportsdirect reports33%(2025)Maintain engagements at healthy levels110m(2018 2022)(i)40%(2025)and(ii)1 senior Board position5(2025)1733.6m12.6m4 4(ii)38%and)38%and(ii)GFD(ii)GFD6 62 282%9.8m433%Customers and Customers and clientsclientsBarclays UK(BUK)Net Promoter Score Barclays UK(BUK)Net Promoter Score(NPS)(NPS)Improve1 11 11 11BUK complaints excl.PPI(YoY move)BUK complaints excl.PPI(YoY move)3 3Reduce complaints and improve resolution time1-17%-17%LifeSkillsLifeSkills Number of people Number of people placed into placed into workwork250,000(2019 2022)270,600270,6004 4193,4004US Consumer Bank Care tNPSUS Consumer Bank Care tNPS2 2Improve1 44 44 43Barclaycard UK NPS Barclaycard UK NPS Improve1 12 12 49|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Our ESG ratings performance1This ESG Assessment was originally provided by VigeoEiris,which is now part of Moodys ESG Solutions|Copyright 2022 Morningstar Sustainalytics.All rights reserved.This publication contains information developed by Sustainalytics().Such information and data are proprietary of Sustainalytics and/or its third party suppliers(Third Party Data)and are provided for informational purposes only.They do not constitute an endorsement of any product or project,nor an investment advice and are not warranted to be complete,timely,accurate or suitable for a particular purpose.Their use is subject to conditions available at https:/ typeRating typeScale Scale(best to worst)(best to worst)201920192020202020212021Year on yearYear on yearMSCI ESG ratingAAA CCCBBBAAAStableS&P Global Corporate Sustainability Assessment(CSA)100 070(77thpercentile)77(88thpercentile)78(92ndpercentile)Declined slightly but relative performance improvedFTSE Russell ESG Rating5 04.8(97thpercentile)4.7(94thpercentile)4.2(92ndpercentile)ImprovedISS ESG Corporate ScoreISS Environmental Disclosure QualityScoreISS Social Disclosure QualityScoreMoodys ESG Solutions ESG Assessment1CDP Climate Change Questionnaire A D-1 101 10100 0A D-C-C-C-Stable11111148(limited)49(limited)55(robust)StableStableStableA-BBImproved20222022AAAA7575(9595ththpercentile)percentile)4.74.7(98(98ththpercentile)percentile)C C-1 11 15555(robust)(robust)A A-ISS GovernanceDisclosure QualityScore1 101087Declined9 9Note:Barclays SustainalyticsESG Risk Rating can be found on the Sustainalyticswebsite:https:/ and sustainability11|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Our climate strategy Barclays is committed to aligning its financing with the goals and timelines of the Paris Agreement,consistent with limiting the increase in global temperatures to 1.5CBarclays is helping to provide the green and sustainable finance required to transform the economies,customers and clients we serveBarclays is working to reduce its Scope 1,Scope 2 and Scope 3 operational emissions1consistent with a 1.5C aligned pathway and to counterbalance any residual emissionsAchieving net zero operationsAchieving net zero operationsFinancing the transitionFinancing the transitionReducing our financed emissionsReducing our financed emissions1 12 23 3See slides 13-14See slides 15-20See slides 21-24Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk.Climate Risk is a Principal Risk under Barclays Enterprise Risk Management FrameworkIn March 2020,we announced our ambition to be a net zero bank by 2050,becoming one of the first banks to do so.We have a three-part strategy to turn that ambition into action:Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial1We define our Scope 3 operational emissions to include supply chain,waste,business travel and leased assets|12|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Energy:Energy:New milestones of 115kWh/m2per year average energy use intensity across our corporate offices by the end of 2035 and 10MW on-site renewable electricity capacity installed across our global real estate portfolio by the end of 2035 EnergyEnergy:Source 100%renewable electricity for our global real estate portfolio by end of 2025 Sustainable financing:Sustainable financing:Facilitate$1tn of Sustainable and Transition financing between 2023 and end of 2030Selected targets and policies and new announcements against them 1By Barclays addressable spend,defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed|2A client is“engaged in”if it generates 5%of its revenue from the activity|3With effect from 1 July 2023|4Refers to all lending,underwriting,issuance of debt and equity,trade and working capital finance|5Oil sands exploration and production companies are those that majority own(50%)or operate oil sands exploration,production and processing assets,other than companies that generate less than 10%of revenue from these activities|Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialAchieving net Achieving net zero zero operationsoperationsFinancing the Financing the transitiontransitionNew announcementNew announcementPreviously announced target/policyPreviously announced target/policyReducing our Reducing our financed financed emissionsemissions1 12 23 3 Sustainable financing:Sustainable financing:Facilitate 150bn of social,environmental and sustainability-linked financing(2018-2025)Sustainable Impact CapitalSustainable Impact Capital:Increase investment of Barclays capital in global climate tech start-ups to 500m by the end of 2027 Sustainable Impact Capital:Sustainable Impact Capital:Invest up to 175m of Barclays own capital in environmentally-focused early-stage companies by 2025 Oil sands policy:Oil sands policy:Only provide financing to oil sands exploration and production clients who have projects to reduce materially their overall emissions intensity,and a plan for the company as a whole to have lower emissions intensity than the level of the median global oil producer by the end of the decade Oil sands policyOil sands policy3 3:Will not provide financing4:o To oil sands exploration and production companies5;oro For the construction of new(i)oil sands exploration,production and/or processing assets;or(ii)pipelines whose primary use is for the transportation of crude oil extracted from oil sands CoalCoal-fired power generation:fired power generation:2030 phase out of financing to clients engaged in2coal-fired power generation in the UK and EU,2035 for the rest of the world(incl.USA)CoalCoal-fired power generation:fired power generation:2030 phase out of financing to clients engaged in2coal-fired power generation in the EU and OECD,2035 for the rest of the world n/a Automotive manufacturing:Automotive manufacturing:2030 target of-40%to-64%reduction in CO2e emissions intensity vs.2022 baseline(Scopes 1,2 and 3)Residential Real Estate:Residential Real Estate:2030 convergence point of-40%reduction in CO2e emissions intensity vs.2022 baseline(Scopes 1 and 2)n/a GHG emissions:GHG emissions:-90%reduction in Scope 1 and 2(market-based)GHG emissions vs.2018 baseline GHG emissions:GHG emissions:New milestones of-50%reduction in GHG supply chain emissions by end 2030 and-90%by end 2050 vs.2018 baseline and 90%of suppliers1to have science-based GHG emissions reduction targets in place by end 203013|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Emissions reduction2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Based on 12 months of consumption from 1 October 2021 to 30 September 2022 compared to 2018 baseline|2Based on 12 months of consumption from 1 October 2020 to 30 September 2021 compared to 2018 baseline|3By Barclays addressable spend|4Committed to or in place|5Campuses include 1 Churchill Place,745 7thAvenue,Radbroke,Northampton,Glasgow,Pune,Whippany,Dryrock|OthersProgress against our net zero operations milestones1 1GHG GHG emissions emissions Scope 1 and 2(Scope 1 and 2(marketmarket-based)reduction based)reduction against 2018 baseline against 2018 baseline-91%,1,1(2021:-86%2)against a target of-90%by end 2025GHG GHG emissions emissions Scope 1 and 2 Scope 1 and 2(location(location-basedbased)reduction against 2018 baselinereduction against 2018 baseline-43C%,1 1(2021:-33%2)against a milestone of-50%by end 2030Campus waste Campus waste diverteddiverted5 565e%(2021:46%)against a milestone of 90%by end 2035Renewable electricity sourcing for our global Renewable electricity sourcing for our global real estate portfolioreal estate portfolio1000%(2021:94%)against a target of 100%by end 2025Proportion of UK company cars transitioned Proportion of UK company cars transitioned to electric vehicles(EV)to electric vehicles(EV)55U%(2021:27%)against a milestone of 100%by end 2025Proportion of our global fleet transitioned to Proportion of our global fleet transitioned to EV or ultraEV or ultra-low emissions vehicles where EVs low emissions vehicles where EVs are not viableare not viable24$%(2021:10%)against a milestone of 100%by end 2030GHG GHG emissions reduction across our supply emissions reduction across our supply chain against 2018 baselinechain against 2018 baseline-8%8%against milestones of-50%by end 2030 and-90%by end 2050SuppliersSuppliers3 3with sciencewith science-based GHG based GHG emissions reduction targetsemissions reduction targets47G%4 4against milestones of 70%by end 2025 and 90%by end 2030Average annual energy use intensity across Average annual energy use intensity across our corporate officesour corporate offices265kWh/m265kWh/m2 2per yearagainst a milestone of 115kWh/m2per year by end 2035OnOn-site renewable electricity capacity site renewable electricity capacity installed across our global real estate portfolioinstalled across our global real estate portfolio0.26MW 0.26MW against a milestone of 10MW by end 2035Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial14|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Reducing our Scope 1 and 2 emissions2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Defined as first reducing carbon dioxide emissions then counterbalancing carbon dioxide emissions from Scope 1,2 and 3 business travel with carbon credit offsets|2Reporting periods are from 1 Oct of prior year to 30 Sep of current year|3Prior year figures have been restated to reflect updated carbon emission factors,improvements in data quality and updates to estimates previously applied.For further details,please refer to Barclays 2022 Annual Report|4Committed to or in place|5By Barclays addressable spend|Addressing our Scope 3 operational emissionsExecuting our net zero operations strategy1 1Our operations have been carbon neutral1since 2020.We will continue to decarbonise our operations to meet our net zero ambitionScope 1 and 2 GHG emissions(000 tCOScope 1 and 2 GHG emissions(000 tCO2 2e)e)2,32,32018201820192019202020202021202120222022MarketMarket-basedbasedScope 1 and 2 GHG emissions257.1108.071.036.821.92025 2025 target of:target of:Reduction inReduction inScope 1 and 2 GHG Scope 1 and 2 GHG emissions emissions vs.2018vs.2018baselinebaselinen/an/a-58X%-72r%-86%-91%-90%LocationLocation-basedbasedScope 1 and 2 GHG emissions218.5198.6171.4147.4123.52030 2030 milestonemilestoneof:of:Reduction in Scope 1 and 2 GHG Reduction in Scope 1 and 2 GHG emissions vs.2018 baselineemissions vs.2018 baselinen/an/a-9%9%-22%-333%-43C%-50P 22 highlights2022 highlights Sourced 100%renewable electricity for our global real estate portfolio ahead of 2025 deadline Signed a 10-year Power Purchase Agreement which will support CreagRiabach,an onshore wind farm project in Scotland Reduced global real estate portfolio energy consumption by 30%compared to 2018 baseline 57%of our global real estate portfolio by area has a third-party verified green building certification as of December 2022Achieved Achieved-8%r8%reduction in GHG emissions across our supply chaineduction in GHG emissions across our supply chainvs.milestones of-50%by end 2030 and-90%by end 2050Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialExpanded our GHG scope 3 inventoryExpanded our GHG scope 3 inventoryto include supply chain,leased assets and waste emissionsReduced air travel by 73%Reduced air travel by 73%compared to 2018 baseline47G%4 4of suppliersof suppliers5 5have science-based emissions reduction targets2022 highlights2022 highlights15|Barclays FY 2022 ESG Investor Presentation|15 February 2023 BlueTrackTMis our methodology for measuring and tracking our financed emissionsat a portfolio level against the goals of the Paris Agreement as outlined in our BlueTrackTMWhitepaper2.Measure client emissions5.Compare financed emissions to benchmark1.Select sector benchmark3.Link emissions to financing4.Aggregate to portfolio levelBlueTrackTMis how we measure our financed emissions2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Targets and progress for Energy are based on absolute emissions.Targets and progress for Power,Cement,Steel,Automotive Manufacturing and Residential Real Estate are based on physical intensity|Methodology covers not only lending but also capital markets financing,better reflecting the breadth of our support for clients through our investment bank Covers Energy,Power,Cement and Steel.Extended assessment to cover two new sectors in 2022 Early adopter of a 2025 Energy absolute emissions reduction target2 2Financed emissions metricsClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialSectorSectorSetting our targetsSetting our targetsMonitoringMonitoringour progress to 2022our progress to 2022SectorSectorSectorSectorboundariesboundariesEmissions Emissions scopescopeGHG includedGHG includedReference Reference scenarioscenarioTarget Target metricmetric1 1Baseline Baseline yearyearTarget vs.baselineTarget vs.baselineCumulative Cumulative changechange1 1Absolute Absolute emissions emissions(MtCO(MtCO2 2e)e)1 1Physical Physical intensityintensity1 1EnergyEnergyUpstream Energy1,2 and3CO2and methaneIEA SDSAbsolute Absolute emissionsemissions2020-15%by end 2025-322Q.751.7 59.6gCO2e/MJIEA NZE2050-40%by end 2030 PowerPowerPower generators1CO2IEA SDSPhysical Physical intensityintensity2020-30%by end 2025-9%9).2302302 kgCOkgCO2 2e/MWhe/MWhIEA NZE2050-50%to-69%by end 2030CementCementCement manufacturers1 and 2All GHGsIEA NZE2050Physical Physical intensityintensity2021-20%to-26%by end2030-2%2%0.70.6100.610 tCOtCO2 2e/te/tSteelSteelSteel manufacturers1and 2All GHGsIEA NZE2050Physical Physical intensityintensity2021-20%to-40%by end 2030-11%1.61.7321.732 tCOtCO2 2e/te/tAutomotive Automotive ManufacturingManufacturingLight Duty Vehicles manufacturers1,2 and 3Scope 1 and 2:allGHGs,Scope 3:CO2IEA NZE2050Physical Physical intensityintensity2022-40%to-64%by end 2030 New sectorNew sector6.2167.2167.2 gCOgCO2 2e/kme/kmResidential Real Residential Real EstateEstateUK buy-to-letand owner occupied mortgages1and 2CO2,methane and nitrous oxideCCC BNZPhysical Physical intensityintensity2022Convergence point vs.baselineNew sectorNew sector1.532.932.9 kgCOkgCO2 2e/me/m2 2-40%by end 203016|Barclays FY 2022 ESG Investor Presentation|15 February 2023 -20 %-40550751001251502020202120222025203020352040Indexed(2021=100)Indexed(2021=100)Progress against our existing sector targetsNew sectors assessedProgress against our existing sector targets and new sectors assessed2 2We aim to assess our baseline financed emissions across the Agriculture,Commercial Real Estate,Aviation and Shipping sectors during 2023We have 1.5C-aligned targets set against 5 NZBA1high-emitting sectorsEnergy:Energy:-322%vs.2020 baselinePower:Power:-9%9%vs.2020 baselineCement:Cement:-2%2%vs.2021 baselineSteel:Steel:-11%vs.2021 baselineAutomotive ManufacturingAutomotive Manufacturing:Set new 2030 target of-40%to-64%vs.2022 baselineResidential Real EstateResidential Real Estate:Set new 2030 convergence point of-40%vs.2022 baseline-15%2 2-40550751001251502020202120222025203020352040Indexed(2020=100)Indexed(2020=100)-50P%-300%2 2-69i01001502002020202120222025203020352040Indexed(2020=100)Indexed(2020=100)-20 %-26&550751001251502020202120222025203020352040Indexed(2021=100)Indexed(2021=100)-40%-64dc-22:167.2gCO2e/km02550751001251502020202120222025203020352040Indexed(2022=100)Indexed(2022=100)-40c-22:32.9kgCO2e/m202550751001251502020202120222025203020352040Indexed(2022=100)Indexed(2022=100)2030 emissions reduction targetsClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial2025 emissionsreduction targets2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Net-Zero Banking Alliance|2Based on IEA SDS Benchmark OECD|Portfolio target pathReference scenarioBarclays portfolio2030convergence point17|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Restrictive policies thermal coal miningNote:Full details of our restrictive policies(including exceptions)are set out in detail in our Climate Change Statement:Our Approach to Sensitive Sectors,and include clear restrictions on thermal coal mining and coal-fired power generation,Arctic exploration and production,oil sands and hydraulic fracturing(fracking).Further restrictions are set out in our Position Statements in relation to Forestry and Agricultural Commodities,World Heritage Sites and Ramsar Wetlands,and Climate Change|1Increase in annual tonnage of thermal coal extracted from existing thermal coal mines by more than 20%measured from a baseline of maximum p.a.tonnage for preceding three years.Expansion in such cases relates to absolute global increases rather than increases for an entity or group as a result of mergers or acquisitions|2Refers to all lending,underwriting,issuance of debt and equity,trade and working capital finance|3Means no member of the group was a client of Barclays as at 1 April 2022|4A client/entity is“engaged in”if it generates 5%of its revenue from the activity|5Unless an undertaking is received from the borrower or we are otherwise satisfied that the proceeds of the GCP financing will not be made available to entities engaged in opening new thermal coal mines or material expansion of existing thermal coal mines|202320232035203520302030 No financing2to existing clients that generate 30%of revenues from thermal coal mining No financing2to new clients3engaged in4thermal coal mining No general corporate financing to clients with entities engaged in4opening new thermal coal mines or material expansion1of existing thermal coal mines5 Phase out financing2to all clients engaged in4thermal coal mining in the EU and OECD countries No financing2to clients that generate 10%of revenues from thermal coal mining in the rest of the world Phase out financing2to all clients engaged in4thermal coal miningExisting policies Existing policies that will continuethat will continue No project finance for greenfield development or material expansion1of thermal coal mines anywhere in the world No General Corporate Purposes(GCP)financing that is specified as being for new or material expansion1of thermal coal mining No financing2to clients that generate 50%of revenue from thermal coal mining2 2Barclays thermal coal mining policy at a glanceClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial18|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Restrictive policies coal-fired power generationNote:Full details of our restrictive policies(including exceptions)are set out in detail in our Climate Change Statement:Our Approach to Sensitive Sectors,and include clear restrictions on thermal coal mining and coal-fired power generation,Arctic exploration and production,oil sands and hydraulic fracturing(fracking).Further restrictions are set out in our Position Statements in relation to Forestry and Agricultural Commodities,World Heritage Sites and Ramsar Wetlands,and Climate Change|1Investment to extend the unabated operating lifetime of existing thermal coal power plants or increase net operational thermal power capacity by more than 20%measure from a baseline of maximum capacity for preceding three years reported.Expansion in such cases relates to absolute global increases rather than increases for an entity or group as a result of mergers or acquisitions|2Refers to all lending,underwriting,issuance of debt and equity,trade and working capital finance|3A client/entity is“engaged in”if it generates 5%of its revenue from the activity|4Unless an undertaking is received from the borrower or we are otherwise satisfied that proceeds of such GCP financing will not be made available to entities engaged in developing new coal-fired power plants or material expansion of existing coal-fired power plants|2 2 No general corporate financing to clients with entities engaged in3developing new coal-fired power plants or material expansion of existing coal-fired power plants4 Phase out of financing2for all clients engaged in3thermal coal-fired power generation Phase out of financing2to all clients engaged in3coal-fired power generation in the EU and OECD No financing2to clients that generate 10%of revenue from coal-fired power generation in the rest of the world202320232035203520302030Existing policies Existing policies that will continuethat will continue No project finance to enable the construction or material expansion1of coal-fired power stations anywhere in the world No General Corporate Purposes(GCP)financing that is specified as being for coal-fired power plant development or material expansion1 No financing2to clients that generate 50%of revenue from coal-fired power generation20252025 No financing2to clients that generate 30%of revenue from coal-fired power generationWe have brought forward our previous 2035 phase out date for the US to 2030,aligning our phase out dates for coalaligning our phase out dates for coal-fired power generation with thermal coal mining fired power generation with thermal coal mining(2030:EU and OECD,2035:rest of the world)Barclays coal-fired power generation policy at a glanceClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial19|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Oil sandsNote:Full details of our restrictive policies(including exceptions)are set out in detail in our Climate Change Statement:OurApproach to Sensitive Sectors,and include clear restrictions on thermal coal mining and coal-fired power generation,Arctic exploration and production,oil sands and hydraulic fracturing(fracking).Further restrictions are set out in our Position Statements in relation to Forestry and Agricultural Commodities and World Heritage and Ramsar Wetlands|1Oil sands exploration and production companies are those that majority own(50%)or operate oil sands exploration,production and processing assets,other than companies that generate less than 10%of revenue from these activities|2Refers to all lending,underwriting,issuance of debt and equity,trade and working capital finance|3Refers to project finance or other lending/underwriting where the use of proceeds is known to be for a particular project|Restrictive policies other sensitive sectorsHydraulic fracturing(Fracking)Arctic oil&gasMountain Top Removal(MTR)coal mining2 2 Current policy effectively reduced lending exposure to oil sands exploration and production companies1to zero at the end of 2022 We are further updating our policiesfrom 1 July 2023 and will not provide financing2:oTo oil sands exploration and production companies1;oroFor the construction of new(i)oil sands exploration,production and/or processing assets;or(ii)pipelines whose primary use is for the transportation of crude oil extracted from oil sands No direct3financing of oil&gas projects in Arctic Circle No financing2to companies primarily engaged in oil&gas exploration and production operations in Arctic Circle No financing2to ancillary Arctic oil&gas businesses where proceeds are known to be for supporting new oil and gas exploration,production or new pipeline transportation projects in the Arctic Circle No direct3financing of projects involving fracking in UK and Europe No financing2to companies primarily engaged in fracking activities in UK and Europe Enhanced Due Diligence(EDD)and additional requirements applied to any financing2for a company involved in fracking activities outside UK and Europe No direct3financing of MTR projects or developments EDD applied to financing facilities for clients who practice MTRClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial20|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Client Transition Framework(CTF)Business/eventsWe engage with our clients through various means and channelsResearchOur CTF will support our evaluation of our corporate clients current and Our CTF will support our evaluation of our corporate clients current and expected progress as they transition to a lowexpected progress as they transition to a low-carbon business model.carbon business model.Together with BlueTrackTogether with BlueTrackTMTM,it will help re,it will help re-shape our portfolio emissions profile shape our portfolio emissions profile 2 2Proactive engagement with many of our clients Proactive engagement with many of our clients on the risks and opportunities from the transitionon the risks and opportunities from the transitionUsing our thought leadership Using our thought leadership to help support client thinkingto help support client thinkingEvaluation methodologyEvaluation methodologyPilot assessment resultsPilot assessment resultsFuture applicationsFuture applications QuantitativeQuantitative:Assesses a clients alignment with our emissions targets and sector benchmarks QualitativeQualitative:Assesses the credibility of a clients transition plan.Considers criteria such as low-carbon technologies employed and green capex or opexplans Results in an overall CTF score from T1(best)to T5(worst)Initial assessments have been conducted for majority of corporate clients in sectors where BlueTrackTMtargets have previously been set(Energy,Power,Cement and Steel)Findings include:o c.80%of assessed clients have climate targetso c.60%of assessed clients have executive compensation tied to achievement of their climate goals We will continue to work to address data quality challenges we have identified CTF results will increasingly be integrated into key bank-wide processes Scores may also be used to inform certain existing processes,allowing us to:o Measure,monitor and report on clients decarbonisation progresso Understand how we can support clients transitiono Identify engagement opportunitieso Inform our own transition plan and progress We will focus our climate-specific engagement on the lowest scoring clientsClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial400400ESG-focused research reports published in 202215,00015,000engagements with clients within the Corporate Bank on ESG topics in 2022(2021:c.5,000)c.2,000c.2,000contacts reached through client events on ESG and sustainability topics in 2022 21|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Facilitating finance for our clients and customers2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1FY22 capital markets financing figures are based on Dealogic data as of 13 January 2022.As data on deals is confirmed throughout the year,these numbers may be subject to changes|2Comprises of labelled,use of proceeds and business mix financing in environmental categories and sustainability-linked financing that incorporates environmental performance targets|Making direct investmentsProgress against our sustainable financing targetsSocial,environmental and Social,environmental and sustainabilitysustainability-linked financing(bn)linked financing(bn)Green Green financingfinancing2 2(bn)(bn)Sustainable Impact Sustainable Impact Capital(Capital(m)m)Green bond investment Green bond investment portfolio(bn)portfolio(bn)3 3New$1tn Sustainable and Transition New$1tn Sustainable and Transition financing target(2023 financing target(2023 end 2030)end 2030)Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial150247.6,12025 targetAchieved to date10087.8,12030 targetAchieved to date500892027 targetAchieved to date42.8Target202222|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Sustainability-linked financing(bn)Year on year progress against our sustainable financing targetsSocial,environmental and Social,environmental and sustainabilitysustainability-linked financing linked financing facilitated facilitated 247.6bn247.6bn,1,1vs.target of 150bn by end 20251 2 3 Green Green financing facilitated financing facilitated 87.8bn87.8bn,1,1vs.target of 100bn by end 2030 2 environmental element of 3 1.43.15.010.811.4,1201820192020202120225.37.814.822.618.0,120182019202020212022YoY%YoY%changechange-20 %YoY%YoY%changechange 6% 6%Includes financing via green bonds,green loans or green equity financing Includes transactions with pricing mechanisms linked to various sustainability performance targets1 12 23 33 3Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialSocial financing(bn)21.823.941.235.724.9,120182019202020212022YoY%YoY%changechange-300%Includes financing for supranational,national and regional development institutionsEnvironmental financing(bn)HighlightsAnnounced new target in December 2022 to facilitate$1tn Sustainable and Transition financing between 2023 and end 20302022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1FY22 capital markets financing figures are based on Dealogic data as of 13February 2022.As data on deals is confirmed throughout the year,these numbers may be subject to changes|Joint Mandated Lead Arranger and Sustainability and Documentation Coordinator for Motability Operations 1.9bn sustainability-linked term and RCF in 2022Lead left bookrunner on Portland General Electrics$500m green financing equity offering in 202223|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Barclays UK1From this year,we have excluded from the reported numbers instances where the Green product has been ported to another propertyas part of a home move,as the new property may not be energy efficient|2Data as of 30 September 2022|Treasury and MarketsCorporate and Investment BankExpanding our sustainable finance activities through specialist teams1,023 1,012 2,571 7,080 FY19FY20FY21FY22Number of Green Number of Green Home Mortgages issuedHome Mortgages issued1 1339453102022 2022 Market Market value:value:2.8bn2.8bnGreen bond Green bond iinvestment nvestment p portfolioortfolioRenewableAgricultureTransportWaste and waterOtherPortfolio Portfolio impact impact by by sector(%)sector(%)2.6bn completed in Green Home Mortgages1as at the end of 20223 3Green Home and BuyGreen Home and Buy-toto-Let MortgagesLet MortgagesGreener Home RewardGreener Home Reward3.4 17.7 87.1 226.7 140.7 103.1 1.4 580.2 580.2 FY22Number of mortgages by EPC ratingNumber of mortgages by EPC rating2 2(000)(000)Originating,structuring and executing tailor-made green,social,sustainability,transition and sustainability-linked capital markets financing solutions for our global clients Duration Manager on the 4.5bn tap of the UKs second Green Gilt in 2022Sustainable Capital MarketsSustainable Capital Markets Advisory and capital raises for emerging growth,climate technology companies and strategic advisory for existing banking clients Advised/acted as underwriter on 22 transactions with total value of$13.5bn in 2022,including green hydrogen leader Haffner Energys IPOSustainable and Impact BankingSustainable and Impact Banking Originating and structuring green and sustainability-linked corporate banking products across lending,trade and project finance Sustainability Coordinator for Cairn Homes plcs 277.5m sustainability-linked facility(includes biodiversity targets)in 2022,the largest of its type arranged in the Irish homebuilding sectorSustainable Product GroupSustainable Product Group Pilot launched in 2022 offering up to 2,000 for mortgage customers who install energy efficient measures in their homesTotal amount of Green Total amount of Green N Notes outstanding(%)otes outstanding(%)Green Structured and Index-Linked NoteGreen Commercial PaperGreen Senior Unsecured Note1422642022:2022:c.0.6bnc.0.6bn Covers a wide range of Barclays issued products used to finance/refinance green assets originated by our corporate and investment banking teamsGreen Green N Notes programmeotes programme2030 ambition:2030 ambition:50%of homes in our mortgage portfolio with a known EPC rating to be rated EPC C or betterClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialEPC rating BEPC rating AEPC rating CEPC rating DEPC rating EEPC rating FEPC rating G42B%Sustainable Impact Capital Sustainable Impact Capital See next slide for details Appointed Head of Sustainable Finance CIB Appointed Head of Sustainable Finance BUK24|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Sustainable Impact Capital:Upsized target to 500m89m invested under Sustainable Impact Capital as at FY22,against a target of 500m by the end of 2027MissionInvestmentprinciplesPortfolio as at FY22Accelerate the transition to a net zero future by investing 500m by the end of 2027(175m by 2025 previously)in global climate tech start-ups,including a focus on:Technologies that are enabling decarbonisationwithin carbon intensive sectors Carbon capture and hydrogen technologiesInvest in propositions that are strategic,impactful and economic:StrategicStrategicSupporting Barclays goal of transitioning its businesses,customers and communities to a net-zero and net-negative long-term operating modelImpactfulImpactfulReaching meaningful environmental benefits,particularly with respect tothe evolving need for decarbonisationEconomicEconomicAchieving long term commercial success by investing in scalable innovators 3 3Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialSynergies between portfolio companiesAccelerate growth and net zero through adoption of innovative technology by Barclays client baseAccess to Barclays expertise and the banks wider ecosystemsSustainable Sustainable Impact Impact CapitalCapital25|Barclays FY 2022 ESG Investor Presentation|15 February 2023 71b%bnbn2021202120222022YoY YoY CarbonCarbon-related related assetsassets1 1288.2288.23 3(41%3of total L&A)302.2302.24 4(38%of total L&A) 5% 5%(-3ppts)o/w:elevated risk exposures250.7(7%of total L&A)55.6(7%of total L&A) 10%(flat)Total L&A707.2794.3 12 222022t total loans and otal loans and advances and loan advances and loan commitments commitments(total L&A):(total L&A):794bn794bnLending portfolio1Assets tied to the energy,transportation,materials and buildings,and agriculture,food and forest products sectors.For 2022,UK Mortgage assets have been included in the figures above.Mortgages do not meet the TCFD definition of a carbon-related asset but are considered carbon-related,and have been covered as part of our work to assess the financed emissions across our portfolio and measure the baseline emissions that we finance across sectors|2Quantitative credit exposures to sectors sensitive to the impacts from climate change.These figures should not be interpreted as an indicator of relative carbon intensity|3Scope has been widened to include UK mortgages(169bn increase)and all Barclays entities as opposed to just material entities(15bn increase)|4Excludes 5.9bn of Fronting Stand By Letter of Credits(SBLCs)that are part of total loans&advances&loans commitments since these amounts are counter-indemnified by other lenders|5Sourced from Dealogic|62021 figures have been recalculated by Dealogic as data on deals is confirmed throughout the year,e.g.in Barclays TCFD Report 2021,our 2021 total financing figure was reported as$548bn|Capital markets financing5Reporting climate risk exposures in line with TCFD recommendationsAgriculture,Food and Forest Agriculture,Food and Forest Products 2.5%Products 2.5%(2021:3.4%)Energy 11.5%(2021:7.2%),Energy 11.5%(2021:7.2%),of which:Oil&Gas 2.6%(2021:2.3%)Power Utilities 8.9%(2021:4.9%)Materials and Building 9.0%Materials and Building 9.0%(2021:11.6%)Transport 2.6%Transport 2.6%(2021:4.3%)Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialCarbonCarbon-related assetsrelated assets1 1CarbonCarbon-related sectors in wholesale creditrelated sectors in wholesale creditFinancing towards carbon-related sectors as a proportion of total financing remained flat YoY at 26%in 2022(2021:26%of total financing of$549bn6)Carbon-related assets1(elevated risk exposures2)Carbon-related assets1(others)Other L&A(incl.loan commitments)20222022t total financing:otal financing:$375bn 375bn Coal Mining and Coal Terminals 0.0%(2021:0.0%)OtherOther6288&|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Joined pilot led by UNEP FI to test the draft TNFD framework methodology,alongside other banksCompleted the second year of our three-year partnership with the Blue Marine Foundation(BLUE),supporting them in delivering their goal of ensuring that at least 30%of the global ocean is effectively protected and the other 70%sustainably managed by 2030Addressing nature and biodiversity considerations in our financing and operations1Association for Financial Markets in Europe|Continued engagement on the transition towards a nature-positive economyActively evolving our approach including through engaging with emerging industry and cross-sector initiativesWe contributed to AFME1and EYs Biodiversity Paper Into the wild:why nature may be the next frontier for capital marketsAs part of the Cambridge Institute for Sustainability Leaderships Banking Environment Initiative,we fed into the paper Integrating climate and nature:The rationale for financial institutionsMember of the TNFD Forum as part of which we have provided feedback to the TNFD on their draft framework Piloted the Taskforce on Nature-related Financial Disclosures(TNFD)draft framework,including the proposed risk assessment process(LEAP-FI)on our UK and European Agriculture and Food portfolio Financing restrictions that seek to address nature and biodiversity-related risk within our position statements in relation to Forestry and Agricultural Commodities,World Heritage Sites and Ramsar Wetlands,and Climate Change Barclays is a signatory to the New York Declaration on Forests and its objective of supporting all endeavours to end natural forest loss by 2030.We intend to update our Forestry and Agricultural Commodities Statement in Q223 Our sustainable and transition financing target includes financing for categories related to nature and biodiversity such as sustainable food,agriculture,forestry,aquaculture and fisheries We have an ambition to achieve and maintain TRUE(Total Resource Use and Efficiency)zero waste certified projects across our key campuses by 2035.We also seek to enhance biodiversity across our buildingsClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial27|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Oxford Sustainable Finance Group Oxford Sustainable Finance Group&the UK Centre for Greening&the UK Centre for Greening Finance and InvestmentFinance and InvestmentBarclays has been a member of PCAF since 2020.During 2022,Barclays co-chaired a Capital Markets Working Group of eight global banks that have developed a proposed methodology to account for the emissions associated with capital markets transactionsNetNet-Zero Zero Banking Alliance(NZBA)Banking Alliance(NZBA)Barclays engages extensively in cross-industry initiatives(1/2)Barclays involvement/additional informationBarclays involvement/additional informationIndustry collaborationIndustry collaborationClimate and Climate and sustainabilitysustainabilityThemeThemeThe CFRF brings together UK regulators and senior financial sector representatives to share their experiences in managing climate-related risks and opportunities.During 2022,Barclays chaired the Transition to Net Zero Working GroupIn September 2022,Barclays became a Strategic Partner of RMIs CCAF.The Centeracts as an implementation partner to banks seeking to align their investments with a net zero futureBarclays is a member of the SMIs Financial Services Taskforce(FSTF).The SMI was launched in 2020 by His Majesty King Charles III when in role as The Prince of WalesIn October 2022,Barclays announced a three-year partnership with Oxford to work on developing a credible methodology for monitoring emissions and creating transition pathways in the agriculture sectorIn 2021,Barclays was a founding member of the NZBA.Since 2022,Barclays has co-led the Sector Work Track within NZBAIn 2022,Barclays contributed to a publication Guidance on Use of Sectoral Pathways for Financial institutionspublished in JuneClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialWorld Business Council for World Business Council for Sustainable DevelopmentSustainable DevelopmentIn 2021,Barclays became a member of the Banking for Impact on Climate in Agriculture(B4ICA)initiative which brings together banks to develop technical data-solutions to support themselves and their clients to align their financial portfolios in the food,agriculture,and land use space towards net zero and Paris Agreement goals.In 2022,Barclays contributed to a publication An Introductory Guide for Net-Zero Target Setting for Farm-Based Agricultural Emissions published in DecemberPRA/FCA Climate PRA/FCA Climate Financial Risk ForumFinancial Risk ForumRMIs RMIs CenterCenterfor Climate for Climate Aligned Finance(CCAF)Aligned Finance(CCAF)Glasgow Financial Glasgow Financial Alliance for Net ZeroAlliance for Net ZeroPartnership for Carbon Partnership for Carbon Accounting FinancialsAccounting FinancialsSustainable Markets Sustainable Markets Initiative(SMI)Initiative(SMI)28|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Barclays engages extensively in cross-industry initiatives(2/2)MultiMulti-thematicthematicJust Just TransitionTransitionBarclays involvement/additional informationBarclays involvement/additional informationIndustry collaborationIndustry collaborationThemeThemeBarclays has been an active member of Ceres since 2019,participating in various working groups across environmental and climate justice,climate-related disclosures,policy engagement and biodiversity.In 2022,we partnered with Ceres to integrate a US perspective onJust Transition,conducting research to organise a stakeholder dialogue on the topic and spoke at their Financing a Net Zero Economy conference during New York Climate week on a Just Transition panelBarclays is a founding member of the BEI,a group of global banks working on actionable pathways towards a sustainable economy,convened by the CISL.In 2022,Barclays engaged with member banks on the topics of Just Transition and natureBarclays has been a member of UNEP FI for more than 20 years and was a founding signatory of the Principles for Responsible Banking(PRB)and joined the NZBA in 2021.From 2021,Barclays Group Head of Sustainability has sat on the Western Europe Banking Board and our CEO joined the Leadership Council in 2022In 2021,Barclays joined over 40 financial institutions and stakeholders to form the Financing a Just Transition Alliance.In 2022 Barclays contributed to the report Making Transition Plans JustClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialNature and Nature and biodiversitybiodiversityBarclays is a member of the TNFD Forum,which is a consultative network of institutional supporters who share the vision and mission of the TNFD.In 2022,we participated in a pilot led by UNEP FI to test the draft TNFD frameworkTaskforce on NatureTaskforce on Nature-related Financial related Financial Disclosures(Disclosures(TNFDTNFD)Forum)Forum CeresCeresUnited Nations United Nations Environment Programme Environment Programme Finance Initiative(UNEP FI)Finance Initiative(UNEP FI)Cambridge Institute of Cambridge Institute of Sustainability Leaderships Sustainability Leaderships(CISL)Banking(CISL)Banking Environment Initiative(BEI)Environment Initiative(BEI)LSE/LSE/Grantham InstituteGrantham InstituteSocial 30|Barclays FY 2022 ESG Investor Presentation|15 February 2023 2112022TargetTarget2 2:11Gender2022 key highlightsEthnicityWe are making progress against our DEI ambitionsFemalesMales29q 222025 ambition:332025 ambition:33s 22Target:33%Target:338%(incl.1 female GFD)62 222025 2025 t targetarget:40%and 40%and 1 senior Board position1 senior Board position1 1Females at Managing Director/Females at Managing Director/Director level Director level Female Group Female Group ExCoExCoand and ExCoExCodirect reportsdirect reportsFemales on Board of Directors Females on Board of Directors Members of the Board from an ethnically Members of the Board from an ethnically diverse background diverse background Increased our female representation at D/MD grades to 29%(2021:28%)Achieved our ambition to double the number of Black MDs in the US and UK to 18 by the end of 2022 Launched partnerships with historically Black Colleges and Universities and Hispanic-Serving Institutions in the USEthnically diverseWhiteRace at Work ambitionsRace at Work ambitionsAt least doublethe number of Black employees at Managing Director level in the UK and US by 2022(2022:18 vs.9 at the end of 2020)Increase number ofunderrepresented employees in UK to 5%overall by 2025(2022:4.6%vs.2020 baseline of 4.1%)Increase number of underrepresentedminority employees in US to 21%overall by 2025(2022:20.3%vs.2020 baseline of 18.1%)Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1As set out in the updated Board Diversity Policy adopted on 15 December 2022.Refer to pages 161-162 of Barclays PLC 2022 Annual Report for further details|2Aligned with the Parker Review on the ethnic diversity of UK Boards|31|Barclays FY 2022 ESG Investor Presentation|15 February 2023 GenderGenderExecuting our DEI strategy against five DEI priorities,through the lens of six core agendas1Represents a network of 47 Historically Black Colleges and Universities and predominantly Black Institutions in the US|2Employee Resource Groups|Workforce Workforce diversitydiversityLeadership Leadership accountabilityaccountabilityDEI DEI prioritiesprioritiesInclusive and Inclusive and equitable equitable culturecultureDEI agendasDEI agendasData Data transparency transparency and and accountabilityaccountabilityOptimisation Optimisation of external of external relationshipsrelationshipsDisabilityDisabilityLGBT LGBT MulticulturalMulticulturalMultigenerationalMultigenerationalSocioSocio-economiceconomic Barclays Military and Veterans Outreach programme supported 45 active duty service members into permanent roles at Barclays Partnership with the Thurgood Marshall College Fund1to increase the diversity of our talent pipelines in the US Participation in the Grace Hopper Celebration in the US 400 full-time job offers extended to women and non-binary technologists Black Professionals Resource Group created Ascent,a development programme to support the progression of Black colleagues Colleagues now able to display their personal pronouns and phonetic spelling/audio recording of their name in internal phonebook UK branch colleagues can now add their pronouns,markers indicating health conditions and flags denoting spoken languages to their name badges Made enhancements to our provision of workplace adjustments for colleagues with disabilities and health conditions Accountable Executives from the Group ExCoappointed to champion DEI across Barclays Hosted second annual Inclusion Summit to engage and mobilise senior leaders in respect of the DEI strategy,reaching 1,000 Barclays leaders and ERG2representatives Colleagues continue to be assessed against a mandatory inclusion performance objective as part of their performance review Held another Count Me In campaign,inviting colleagues in the UK and US to review and share their personal details on HR systems in line with local privacy laws Began producing an enhanced monthly management pack for senior leaders,providing a detailed breakdown of progress against our Race at Work and gender ambitions Disability resources and supportDisability resources and support:Business Disability Forum,Disability Confident and Disability:IN LGBT and Gender inclusivity feedbackLGBT and Gender inclusivity feedback:Stonewall,Pride Circle,and Working Mother Media Platforms to connect with Multicultural talentPlatforms to connect with Multicultural talent:COQUAL,Thurgood Marshall Fund,National Urban League,amongst others Multigenerational and socioMultigenerational and socio-economic supporteconomic support:Working Families,Carers UK,and the UK Socioeconomic Taskforce Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial32|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Attracting talent1Total number of vacancies filled by internal candidates|Listening to our colleaguesDeveloping our colleaguesInvesting in our colleagues,strengthening our business and culture Doubled the number of recruiters to support our businesses Launched the Onboarding app,giving new joiners and their people leaders access to information required prior to joining Barclays Used our all-colleague Your View and pulse surveys to capture insights which help us better understand our culture and improve colleague experience CEO held 50 engagement sessions with colleagues Updated policies on Working Flexibly,taking into account our colleagues needs,and requirements of each role Continued investment in our flagship leadership development programmes:The Enterprise LeadersSummit,Strategic Leaders Programme,and Aspire Wide range of development opportunities delivered through our digital learning platform,Learning Lab Launched new Scholar programme for Graduates,providing support,development and training in either technical skill sets or leadership pathwaysClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial#1#1ranked in the LinkedIn ranked in the LinkedIn Top Companies UK 2022 listTop Companies UK 2022 list45Emale promotion rate Female promotion rate(2021:47%)2,4712,471Graduates,Interns and Apprentices hired in Graduates,Interns and Apprentices hired in 2022 2022(2021:2,039)43C%Role vacancies filled internallyRole vacancies filled internally1 1(2021:39%)1717Training hours on average Training hours on average per annum per employeeper annum per employee(2021:15)1,0351,035colleagues enrolled in flagship leadership colleagues enrolled in flagship leadership development programmesdevelopment programmes85%of colleagues“would recommend Barclays of colleagues“would recommend Barclays to people they know as a great place to work”to people they know as a great place to work”(2021:82%)86%Wellbeing index Wellbeing index(2021:84%)82%Inclusion index Inclusion index(2021:79%)33|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Proud Proud initial signatoryinitial signatoryof the Contingent Reimbursement Model of the Contingent Reimbursement Model CodeCode2 2 Continued to invest in multi-layered security systems such as App ID,allowing Barclays colleagues to verify to customers that they are a legitimate caller Founding members of Stop Scams UK a cross industry group aimed at making it harder for scammers to operate Launched new Fraud and Scams hub on our website to educate the public on how to keep themselves safe Launched Authorised Users creates the ability for customers to add someone they trust to their Barclays Current Account13.5m13.5mcustomers reached out to proactively in 2022 with targeted emailscustomers reached out to proactively in 2022 with targeted emails Developed a Financial Wellbeing Scale to provide in-depth data analysis,monitored across BUK customer base for signs of potential financial difficulty Launched Rainy Day Saver account to encourage healthy saving habits Expanded our Money Management and Money Worries hub to provide customers with guidance on adapting to financial challenges Launched nationwide campaign on cost of living in November 2022,providing practical support and tips for customers on navigating the challenging financial environment600600“Business Health Pledge“Business Health Pledge MasterclassessMasterclassess”delivered,discussing with small”delivered,discussing with small businesses about the issues impacting thembusinesses about the issues impacting them Met US Community Reinvestment Act goals for 2022 by supporting and investing in local CDFIs1,small-medium businesses and non-profits Tripled the size of our specialist support teams in 2022 to aid businesses showing signs of financial distress Made a contribution of 250k to Business Debtline to enable them to digitise their free debt advice services and broaden their impact10.5m10.5mBarclays UK mobile active customersBarclays UK mobile active customers Basic current account access to basic banking services for everyoneo 660,000 accounts open as of December 2022 Mortgages helped c.40,000 first-time buyers get onto the property ladder in 2022 Building out Barclays Local:in-person banking support in 200 locations through flexible banking pop-ups in addition to our mobile van network Launched new Cashback without Purchase programme to give customers access to cash in communities without a branch or cashpointRetail1Community Development Financial Institutions|2Setting out increased consumer protection standards|Cost of living supportSupporting our customers and clientsSMEsCyber and digital trustClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial34|Barclays FY 2022 ESG Investor Presentation|15 February 2023 20,000 participants20,000 participantsacross across our digital upskill events in our digital upskill events in 20222022 Code Playground provided 437,000 children a start in coding Digital Wings freeonline learning platform for digital education with 132,000 registered users and 50 hours of learning content Digital Eagles passionate colleagues,helping everyone get the most out of digital Digital Champions programmes supporting individuals to help in their organisations or community bridge the digital divide Digital upskill online videos and sessions to boost digital confidenceLaunched Barclays Community Football Fund(BCFF)in 2022Launched Barclays Community Football Fund(BCFF)in 2022with a target to support 5,500 community groups across the UK by 2025with a target to support 5,500 community groups across the UK by 2025 Remain committed to the Barclays Girls Football School Partnerships,launched in 2019:o c.3,000 schools joined the scheme in 2022,taking the total to c.16,000 with a target of 20,000 schools to join by 2024 Supported 2,000 organisations in 2022 through BCFF,engaging 268,000 young people in inclusive football activities Building digital skills2022 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol were subject to KPMG Independent Limited Assurance under ISAE(UK)3000 and ISAE3410.Refer to the ESG Resource Hub for further details:home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/|1Includes a subset of the 18.1m people reached through LifeSkills since 2013|2In 2019,Barclays published new Citizenship commitments for the end of 2022.Against these commitments,the number of people upskilled through LifeSkills runs over a five-year period,from 2018-2022,and the number of people placed into work runs over a four-year period,from 2019-2022|3Includes charitable giving,management costs,and monetised work hours of Barclays colleagues working in partnership with respected NGOs,charities and social enterprises|Supporting our communitiesSupporting those in needSkills and employabilitySupporting womens and girls footballClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial18.1m18.1m people people reached through Barclays reached through Barclays LifeSkillsLifeSkillssince 2013since 2013 Through LifeSkills,we are helping people to develop the skills,confidence,and connections they need to succeed at work and manage their moneyo 12.6 million1people upskilled since 2018 vs.a target of 10m by 2022o 270,600 people placed into work since 2019 vs.a target of 250,000 by 20222o 95%of 2022 participants reported an improvement in confidence and motivation,and 92%reported an improvement in knowledge and skills 44.7m44.7m3 3invested invested in in our communities in 2022our communities in 2022 Donated 1m to British Red Cross to provide vital humanitarian assistance and on-the-ground support for those impacted by the conflict in Ukraine Launched partnership with Trussell Trust to help UK households with rising cost of living unlocked 2.3m since Apr-22 for those struggling With Barclays matching,colleagues raised 9.3m for 1,800 charities in 2022 Supported 11,900 colleagues to donate via our UK Payroll Giving programme matched 0.7m in 202235|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Home to 120 FinTechs Rise members raised$860m venture funding in 2022 To connect technology,talent and trends across the Rise ecosystem to accelerate innovation and growth FinTech workspaces in London and New York Global virtual community providing access to mentoring,thought leadership and growth opportunities Global partnership supporting growth-stage entrepreneurs solving pressing social and environmental challenges To support 250 businesses by 2022 Reached 269 companies to date To actively scale businesses solving pressing global challenges while creating the jobs of tomorrowSupporting the early-stage and entrepreneurial ecosystemsProgrammeProgrammeDescriptionDescriptionScale/GoalScale/GoalMissionMissionBarclays Black Founders Accelerator 20 week digital first programme to empower founders who are rethinking the traditional approach to Finance To have 750 founders supported by 2025 To create future FinTechs,supporting emerging founders to transition their idea into Minimum Viable Product(MVP)10 week digital first programme for high growth FinTech founders To have 50 FinTechs supported by 2025 To scale strategically relevant FinTechs and transition their founders into CEOs Network of co-working spaces,growth programmes,mentors and industry experts for high-growth tech start-ups Supported 9,600 businesses in 2022 Committing up to 2.5m investment from 2023 in Carbon13 partnership To interconnect the UK entrepreneurial ecosystem to help connect,innovate and grow Programme designed to champion diversity in entrepreneurship and showcase Black Founder-led businesses 3 cohorts to date,115 businesses supported To help ambitious UK-based businesses with tech or digital bias,traction beyond MVP and one or more Black Founders A US,UK and Europe based studio,with investment capital dedicated to cultivating entrepreneurial talent in women$30m of capital allocated$10m invested in 10 portfolio companies to date To continue to bring women into entrepreneurship and close the fundraising gender gapClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial Programme to identify strategic opportunities across the bank,design and deliver pilots to ensure the success of our scaled partnerships Launch 6 new ventures by 2027 Transform finance for Barclays teams and clients through effective FinTech partnerships and co-creation Programme of masterclasses designed to help women drive growth and achieve funding To support 40 innovative female-led technology businesses;120 applications received to date To bring more women into entrepreneurship and level the playing fieldBarclays Female Founders Accelerator GovernanceGovernance37|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Board Governance Framework1 Julia Wilson will take over as Chair of the Board Audit Committee with effect from 1 April 2023,subject to regulatory approval|2For the year ended 31 December 2022|3Per the Board composition as at 31 December 2022|4Please refer to page 166 of the Barclays PLC Annual Report 2022 in relation to the tenure and continued independence of Tim Breedon and Mike Ashley,who have served on the Board for more than nine years|Board Experience3Strong Board Governance Barclays PLC BoardBarclays PLC BoardChair:Nigel HigginsChair:Nigel HigginsBoard Audit CommitteeBoard Audit CommitteeChair:Chair:Mike AshleyMike Ashley1 1Board Remuneration Board Remuneration CommitteeCommitteeChair:Brian Chair:Brian GilvaryGilvaryBoard Nominations CommitteeBoard Nominations CommitteeChair:Nigel Chair:Nigel HigginsHigginsBoard Risk CommitteeBoard Risk CommitteeChair:Robert BerryChair:Robert BerryBoard allocation of time Board allocation of time(%)(%)2 2Length of tenure(Chairman and NonLength of tenure(Chairman and Non-Executive Directors)Executive Directors)Industry Industry and leadership experience and leadership experience(no.of directors)(no.of directors)International experience(no.of directors)International experience(no.of directors)1113Financial Financial ServicesServicesInternational(UK)International(UK)87International(US)International(US)International International(Rest of the World)(Rest of the World)8Political/regulatory Political/regulatory experienceexperience4Accountancy/Accountancy/auditingauditing1Operations/Operations/technologytechnology2Retail/Retail/marketingmarketingCurrent/recent Current/recent Chair/CEOChair/CEO10423240-3 years3-6 years6-9 years9 years4620313Strategy formulation and implementation monitoringFinance(including capital and liquidity)Governance and risk(including regulatory issues)Other(including remuneration)Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial38|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Group Head of Group Head of SustainabilitySustainabilityOversight and management of climate-related issues are embedded within our governance structureGroup Executive Group Executive Committee(Committee(ExCoExCo)Barclays PLC Board Barclays PLC Board The Barclays PLC Board sets the strategy for the groupBusiness/Legal Entity Committees and Business/Legal Entity Committees and ForumsForumsBoard Board Risk Risk CommitteeCommitteeBoard Board Audit Audit CommitteeCommitteeBoardBoardExecutive Executive management management committees committees and forumsand forumsForums/Forums/OtherOtherClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialRemuneration for our Executive Directors is linked to non-financial elements including climate and sustainability measuresBoard Remuneration CommitteeBoard Remuneration CommitteeGroup Group Reputational Risk Reputational Risk CommitteeCommitteeGroup Risk Group Risk CommitteeCommitteeAccountable Accountable Functions Chief Functions Chief Operating Office Operating Office ExCoExCoClimate Transaction Climate Transaction Review CommitteeReview CommitteeClimate Portfolio Climate Portfolio Governance BoardGovernance BoardDisclosure Disclosure CommitteeCommitteeClimate and Sustainable Finance CouncilClimate and Sustainable Finance CouncilPrincipal Investments Equity CommitteePrincipal Investments Equity CommitteeClimate Climate Risk&Risk&Controls Controls ForumForumClimate Climate Risk Risk CommitteeCommitteeOperational Operational Sustainability Sustainability Steering CommitteeSteering CommitteeLegal&Technical Legal&Technical CommitteeCommitteeSenior Senior managementmanagementGroup Chief Group Chief Compliance OfficerCompliance OfficerGroup Chief Risk Group Chief Risk OfficerOfficerGroup Head of Group Head of Climate RiskClimate RiskGroup Chief Group Chief Operating OfficerOperating OfficerBX Risk and Finance BX Risk and Finance Chief Operating Chief Operating OfficerOfficerHeads of Sustainable Heads of Sustainable Finance Finance CIB and CIB and BUKBUKGroup Head of PPCRGroup Head of PPCRGroup Finance Group Finance DirectorDirectorGroup Head of Group Head of Finance Finance Sustainability and Sustainability and ESGESGCEOs CEOs Corporate&Corporate&Investment Bank Investment Bank(CIB)and Barclays UK(CIB)and Barclays UK(BUK)(BUK)39|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Focused Focused on the areas where we can on the areas where we can have the greatest longhave the greatest long-term term impactimpact Making growth green,sustainable and inclusive Managing the environmental and social impacts of our business Running a responsible business Investing in our communities To To deliver excellent deliver excellent serviceservice Communicate clearly and transparently without jargon Do not offer unsuitable products Maintain customer and client confidentiality Avoid undeclared actual or potential conflicts of interest Operate in line with relevant laws and regulationsTo To promote respect,diversity and promote respect,diversity and performance performance in the in the workplaceworkplace Take responsibility for success and failure Respect and value people from all backgrounds Challenge and escalate issues of concern fairly and clearly Recognise and celebrate colleagues achievementsMaintaining strong governance,robust Maintaining strong governance,robust controls and high ethical standardscontrols and high ethical standards Practice responsible risk management and due diligence Ensure colleagues understand role-specific controls and governance Protect and enhance our reputation Apply high standards of professional and ethical conduct at all timesThe Barclays Way outlines our Purpose,Values and Mindsetthat govern our way of workingThe Barclays Way our Code of ConductHow we behaveClimate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialOur PurposeOur PurposeOur Our ValuesValuesOur Our MindsetMindsetTowards colleaguesTowards customers/clientsTowards societyManaging risk40|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Individuals are encouraged to speak up directly to their management,Compliance,HR or Legal.However,where they do not feel comfortable using these avenues,the Raising Concerns process is in placeColleagues are encouraged to speak up about actions and behaviours that have no place in the organisation.Board Board Level“Level“WhistleblowersWhistleblowersChampionsChampions1 1”are responsible for ensuring and overseeing the integrity,independence and effectiveness of our whistleblowing programmeWe continue to foster a culture where our colleagues feel safe to speak up1Chair of the Group Board Audit Committee and Chair of the BUK Board Audit Committee|In 2022,the whistleblowing team opened a total of 52 whistleblowing concerns(2021:134)72 whistleblowing matters were closed in 2022(2021:205),of which 15%(2021:19%)were found to have some level of substantiation.None of the Retaliation concerns closed in 2022 were substantiatedColleaguesColleaguesCarefully assess the concerns raised and refers them to the most appropriate team for review and,where appropriate,investigationRaising Raising Concerns TeamConcerns TeamAny concerns assessed as whistleblowing will be directed to a dedicated team within ComplianceWhistleblowing Whistleblowing TeamTeamComplianceComplianceHRHRLegalLegalLine managerLine managerFirst First point of contactpoint of contactWhistleblowing cases opened in Whistleblowing cases opened in 2022:2022:5252Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocial15131158Breach of Breach of Controls,Controls,Process,OtherProcess,OtherRetaliationRetaliationBreach of PolicyBreach of PolicyFinancial crimeFinancial crimeOtherOther41|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Barclays invests in maturing its resilience and cyber capability to respond to threats which may impact our customers,clients and market stability1Cybersecurity and Infrastructure Security Agency|Climate andClimate ands sustainabilityustainabilityGovernanceGovernanceSocialSocialRobust processes in place with strong foundationsEnhanced cyber response to protect against attacksLeverage our resilience capabilities to respond appropriately to heightened threats and that products are built resilientlyRegular collaboration and alignment with peer financials across UK/US/Global sectorsEstablished intelligence-led impact triage process and daily monitoring of operations to enable prioritisation and manage new threatsRegular validation of our Group and Business crisis management,recovery and response protocolsDigital Economic Crime upstream detection and disruption to protect customers from scams using advanced campaign analytics,industry and law enforcement engagementRegular benchmarking with regulators and peers to identify and adopt best practiceEnhanced resilience framework focuses on critical services and ability to recover from harm for our customersPrioritise technology vulnerability patching&model adversary tactics,techniques&proceduresSector and Government information sharing.Global Cyber Security agency focus&following US CISA1guidanceJoint Operations Central Horizon Scanning&All Impacts TriageSupplier&Third Party rapid communication,engagement&responseFocus on emerging threats from shifting global geopoliticsIdentify and plan for plausible cyber conflict scenariosTest our most critical services against plausible events which may cause customer harm,impact Barclays safety and soundness and disrupt financial market stabilityResilience requirements are embedded into Barclays change processes so that products for our most critical services are built resiliently for our customers42|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Annual ReportAnnual ReportESGESG-related reportingrelated reportingESG data resourcesESG data resourcesOther ESG resourcesOther ESG resourcesStatements and policy positionsStatements and policy positionsIndicesIndicesTaskforceon Climate-related Financial Disclosures(TCFD)Principles for Responsible Banking(PRB)ESG(non-financial)Data CentreESG Investor presentationsVarious-See websiteSustainability Accounting Standards Board(SASB)ESG-related disclosures Fair Pay reportLimited Independent Assurance statementGlobal Reporting Index(GRI)UK Pay Gaps reportBarclays Sustainable Finance FrameworkBoard Diversity PolicyBlueTrack WhitepaperDiversity,Equity and Inclusion reportCorporate Transition Forecast Model(Tax)Country Snapshot reportInvestor RelationsCorporate CommunicationsFor further information:2023 ESG Resource Directory:https:/home.barclays/sustainability/esghttps:/home.barclays/sustainability/esg-resourceresource-hub/hub/Susie Susie Guo,Group Media Relations DirectorGuo,Group Media Relations DHolly Brown,Climate CommunicationsHolly Brown,Climate CChis Chis Manners,Head of Investor RelationsManners,Head of Investor RIro Papadopoulou,Head of ESG Investor RelationsIro Papadopoulou,Head of ESG Investor RMaritz Carvalho,ESG Investor RelationsMaritz Carvalho,ESG Investor RJake Kang,ESG Investor RelationsJake Kang,ESG Investor Relationsjin-43|Barclays FY 2022 ESG Investor Presentation|15 February 2023 Important information DisclaimersDisclaimersIn preparing this FY 2022 ESG Investor Presentation and the climate and sustainability content within the Barclays PLC Annual Report,we have:made a number of key judgements,estimations and assumptions,and the processes and issues involved are complex.This is for example the case in relation to financed emissions,portfolio alignment,classification of environmental and social financing,operational emissions and measurement of climate riskused ESG and climate data,models and methodologies that we consider to be appropriate and suitable for these purposes as at the date on which they were deployed.However,these data,models and methodologies are subject to future risks and uncertainties and may change over time.They are not of the same standard as those available in the context of other financial information,nor subject to the same or equivalent disclosure standards,historical reference points,benchmarks or globally accepted accounting principles.There is an inability to rely on historical data as a strong indicator of future trajectories,in the case of climate change and its evolution.Outputs of models,processed data and methodologies will also be affected by underlying data quality which can be hard to assess or challenges in accessing data on a timely basiscontinued(and will continue)to review and develop our approach to data,models and methodologies in line with market principles and standards as this subject area matures.The data,models and methodologies used and the judgements estimates or assumptions made are rapidly evolving and this may directly or indirectly affect the metrics,data points and targets contained in the climate and sustainability content within this presentation and the Barclays PLC Annual Report.Further development of accounting and/or reporting standards could impact(potentially materially)the performance metrics,data points and targets contained in this presentation and the Barclays PLC Annual Report.In future reports we may present some or all of the information for this reporting period using updated or more granular data or improved models,methodologies,market practices or standards or recalibrated performance against targets on the basis of updated data.Such re-presented,updated or recalibrated information may result in different outcomes than those included in this presentation and the Barclays PLC Annual Report.It is important for readers and users of this report to be aware that direct like-for-like comparisons of each piece of information disclosed may not always be possible from one reporting period to another.Where information is re-presented,recalibrated or updated from time to time,our principles based approach to reporting financed emissions data(see page 87)sets out when information in respect of a prior year will be identified and explainedappointed KPMG LLP to perform limited independent assurance over selected ESG content,which have been marked with the symbol.The assurance engagement was planned and performed in accordance with the International Standard on Assurance Engagements(UK)3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the International Standard on Assurance Engagements 3410 Assurance of Greenhouse Gas Statements.A limited assurance opinion was issued and is available at the website link(home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/).This includes details of the scope,reporting criteria,respective responsibilities,work performed,limitations and conclusion.No other information in this presentation has been subject to this external limited assuranceInformation provided in climate and sustainability Information provided in climate and sustainability disclosuresdisclosuresWhat is important to our investors and stakeholders evolves over time and we aim to anticipate and respond to these changes.Disclosure expectations in relation to climate change and sustainability matters are particularly fast moving and differ in some ways from more traditional areas of reporting in the level of detail and forward-looking nature of the information involved and the consideration of impacts on the environment and other persons.We have adapted our approach in relation to disclosure of such matters.Our disclosures take into account the wider context relevant to these topics,including evolving stakeholder views,and longer time-frames for assessing potential risks and impacts having regard to international long-term climate and nature-based policy goals.Our climate and sustainability-related disclosures are subject to more uncertainty than disclosures relating to other subjects given market challenges in relation to data reliability,consistency and timeliness,and in relation to the use of estimates and assumptions and the application and development of methodologies.These factors mean disclosures may be amended,updated,and recalculated in future as market practice and data quality and availability develops.ForwardForward-looking Statementslooking StatementsThis document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934,as amended,and Section 27A of the US Securities Act of 1933,as amended,with respect to the Group.Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements.Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.Forward-looking statements sometimes use words such as may,will,seek,continue,aim,anticipate,target,projected,expect,estimate,intend,plan,goal,believe,achieve or other words of similar meaning.Forward-looking statements can be made in writing but also may be made verbally by directors,officers and employees of the Group(including during management presentations)in connection with this document.Examples of forward-looking statements include,among others,statements or guidance regarding or relating to the Groups future financial position,income levels,costs,assets and liabilities,impairment charges,provisions,capital,leverage and other regulatory ratios,capital distributions(including dividend policy and share buybacks),return on tangible equity,projected levels of growth in banking and financial markets,industry trends,any commitments and targets(including environmental,social and governance(ESG)commitments and targets),business strategy,plans and objectives for future operations and other statements that are not historical or current facts.By their nature,forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.Forward-looking statements speak only as at the date on which they are made.Forward-looking statements may be affected by a number of factors,including,without limitation:changes in legislation,regulation and the interpretation thereof,changes in IFRS and other accounting standards,including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards;the outcome of current and future legal proceedings and regulatory investigations;the policies and actions of governmental and regulatory authorities;the Groups ability along with governments and other stakeholders to measure,manage and mitigate the impacts of climate change effectively;environmental,social and geopolitical risks and incidents and similar events beyond the Groups control;the impact of competition;capital,leverage and other regulatory rules applicable to past,current and future periods;UK,US,Eurozone and global macroeconomic and business conditions,including inflation;volatility in credit and capital markets;market related risks such as changes in interest rates and foreign exchange rates;higher or lower asset valuations;changes in credit ratings of any entity within the Group or any securities issued by it;changes in counterparty risk;changes in consumer behaviour;the direct and indirect consequences of the conflict in Ukraine on European and global macroeconomic conditions,political stability and financial markets;direct and indirect impacts of the coronavirus(COVID-19)pandemic;instability as a result of the UKs exit from the European Union(EU),the effects of the EU-UK Trade and Cooperation Agreement and any disruption that may subsequently result in the UK and globally;the risk of cyber-attacks,information or security breaches or technology failures on the Groups reputation,business or operations;the Groups ability to access funding;and the success of acquisitions,disposals and other strategic transactions.A number of these factors are beyond the Groups control.As a result,the Groups actual financial position,results,financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Groups forward-looking statements.Additional risks and factors which may impact the Groups future financial condition and performance are identified in the description of material existing and emerging risks from page 208 of the Barclays PLC 2022 Annual Report.Subject to Barclays PLCs obligations under the applicable laws and regulations of any relevant jurisdiction(including,without limitation,the UK and the US)in relation to disclosure and ongoing information,we undertake no obligation to update publicly or revise any forward-looking statements,whether as a result of new information,future events or otherwise.
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Leaving a positivelegacy for our world2021 ENVIRONMENTAL,SOCIAL&GOVERNANCE REPORTleaving apositivelegacy for our worldFiscal 2020 net sales by category1,300 stores 14 M total store square footage6 distribution and fast fulfillment centers3 M square feet in distribution centers50 states25,000 products in store600 brands offered$6.5 B fiscal 2020 net sales40,000 associates as of January 29,2022Ulta Beauty at-a-glanceOur footprint(as of January 29,2022)EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report1Introductionleaving apositivelegacy for our worldDave Kimbell took the reins as Ulta Beautys CEO in June 2021 when former CEO Mary Dillon became Executive Chair of our Board of Directors.We asked Dave some questions to learn more about him and his perspectives on the role of ESG at Ulta Beauty.You became CEO during a global pandemic that is still with us,impacting almost every aspect of our lives.As you reflect on leading Ulta Beauty during this time of uncertainty and change,can you share a few things that have really stood out to you most during your first year as a CEO?A:I have been with Ulta Beauty for eight years and now,as CEO,I am more impressed than ever with our 40,000 associates resilience and agility,laser focus on our guests and role in helping Ulta Beauty make a positive impact on the world around us.As leaders in an industry that is so emotional and relies on human connection,the Ulta Beauty team continues to show the world their passion,expertise and commitment to beautiful possibilities.This stands out every single day to me.Our associates,particularly in our stores and distribution centers,show up daily,ready to serve our guests while facing continued challenges posed by the pandemic.They keep the health and safety of our guests and their fellow associates at the center of all they do,despite continued uncertainty in their personal lives involving school,childcare,family and other responsibilities.I could not be prouder of their flexibility and ability to quickly pivot as circumstances shift.How did you continue to support associates and advance other priorities during this challenging time?First and foremost,we focused on taking care of our people.It is humbling to witness the focus our associates bring to deliver amazing guest experiences.Thats why my leadership team,our Board of Directors and I work hard to ensure our associates are supported as much as possible,and youll be able to read about many of the ways we care for our associates,professionally and personally,in this report.I also am inspired by,and extremely proud of,our commitment to improving the world we live in and the strong steps we have taken to drive positive change with our diversity,equity and inclusion(DEI)efforts,to further reduce our impact on the environment and to give back to the communities we serve.Associates across our company contribute to these important commitments in many ways,and were excited to share some of those in this years report.You shared with investors during Ulta Beautys recent Analyst Day that ESG was one of your long-term strategic priorities.Why was it important to you to elevate ESG to a strategic priority?ESG has always been and will always be a critical part of Ulta Beautys DNA.By highlighting its importance as one of our long-term strategic priorities,we are being more intentional about our vision and goals within our core ESG PillarsPeople,Product,Environment and Communityand how each plays an important role in our overall business strategy and daily work.We have a responsibility to be good stewards of our business for our shareholders and key stakeholders.We have an equally important responsibility to be good stewards of the world around us.This is important to me personally.I am as A conversation with Dave KimbellUlta Beauty Chief Executive OfficerEnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report2Introductionleaving apositivelegacy for our worldemissions,and we understand that a holistic emissions reduction target is an important next step.To help move us forward,we are pleased to have committed to set science-based emissions reduction targets with the Science Based Targets initiative and are moving to take important next steps.How about progress on the social front?Last year we announced our commitment to DEI externally for the first time,and Im very proud of the strides we have made and the positive impact that we know has been felt by our guests,associates and partners.Highlights for me include launching MUSE 100,doubling the number of Black-owned brands in our assortment,investing in in-store guest experience training and integrating DEI across our internal talent life cycle.Today 90%of our associates are women with 54%women directors on our Board and 67%women leaders on our executive team.In addition,25%of directors and above at Ulta Beauty are people of color.We plan to continue to build upon this strong foundation to improve not only how we hire diverse talent,but also how we develop existing diverse talent.We have work to do to better identify the skills and aspirations of our incredibly diverse store and distribution center associates and ensure they have access to leadership opportunities across the company.While we expect to establish goals for improving our already strong foundation,our priority in the near term is setting our associates up for success to fulfill their respective career paths.We also announced our DEI commitments for 2022,which are thoughtfully designed to drive forward our internal and external efforts in new and creative ways to continue to champion diversity and keep our DEI values at the heart of what we stand for at Ulta Beauty.The commitments span four categories with a focus on passionate about the beauty of our planet as I am about the beauty industry.I believe Ulta Beauty,as the nations largest beauty retailer,is in a unique position to bring the beauty community together and make a real difference.We know we cant do it all,but by keeping ESG a strategic priority,we are focusing on key areas where we think we can make the biggest impact.How will you know when youve made an impact?We believe having clear,measurable goals is very important to help drive impact.In the same way we use a variety of data and metrics to establish financial goals for our business,we need data to understand where we are today and what metrics are most appropriate to measure future progress in areas like emissions reduction and DEI.In addition,we must have the infrastructure in place to measure progress toward our goals accurately and transparently.We are making great progress,but acknowledge we have more work to do.What are some of the areas where youve made progress this year?In this report,were proud to share a more fulsome view of our Scope 3 emissions for the first time.We are already making good progress reducing Scope 1 and 2 amplification of underrepresented voices,assortment growth and equitable guest and associate experiences with a total planned investment of$50 milliondoubling our 2021 commitment.This is Ulta Beautys second ESG report.What is different this year?We were very proud of our first ESG report and have reflected upon opportunities to improve it this year.Soon after the 2020 report was published,our cross-functional team led by Jodi Caro,our General Counsel,Chief Risk&Compliance Officer,got to work asking for feedback from investors,brand partners,associates,experts and more.They didnt hold back,and we incorporated much of what we heard into this years report.Notably,youll see more data,more disclosure and more information on topics like cybersecurity risks,Board governance relative to ESG and our approach to environmental impacts.The report is easier to navigate,including an ESG Fact Sheet to help you quickly locate the data and disclosures that interest you most.Finally,what is the one thing you want everyone who reads this report to take away?We are passionate about making a positive impact on the world through the power of beauty,but we know we arent perfect.This journey will take discipline and commitment from all.While we are proud of our ESG achievements to date,we know we cannot be complacent.At Ulta Beauty we also know we are stronger when we work together,and we look forward to continuing this important work together with our associates,partners and so many others who can help us make a difference for our world.I hope you continue to join us on our journey as we continue to unlock beautiful possibilities.EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report3Introductionleaving apositivelegacy for our worldLeaving a positive legacy for our worldESG at Ulta BeautyESG has long been an Ulta Beauty priority and is embedded in all aspects of our overall strategic planning.In 2021,we evolved our longer-term business strategy and ESG approach to better reflect the evolving role that beauty will play in peoples lives today and tomorrow.Ulta Beauty Guiding ESG PrinciplesWE USE THE POWER OF BEAUTY FOR GOODWe embrace our opportunity as a leader to drive positive impact through beautyWE PURSUE ESG AS A VALUE DRIVERESG drives business value as part of our core strategyWE TAKE A TARGETED APPROACHWe focus on the areas in which we can make the biggest impactWE BALANCE LEADING AND LEARNINGWe collaborate with others to address shared challenges WE STAY TRUE TO WHO WE AREOur ESG approach reflects our unique culture,mission,and valuesUlta Beauty strategic frameworkProtect and cultivate our WORLD-CLASS CULTURE AND TALENTExpand our ENVIRONMENTAL AND SOCIAL IMPACTDrive OPERATIONAL EXCELLENCE AND OPTIMIZATIONDrive breakthrough and disruptive growth through an expanded definition of ALL THINGS BEAUTY Evolve the omnichannel experience through connected physical and digital ecosystems ALL IN YOUR WORLDExpand and deepen our presence across the beauty journey as the HEART OF THE BEAUTY COMMUNITYEnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report4Introductionleaving apositivelegacy for our worldIn early 2021,we announced five broad commitments to create a more inclusive world for our guests,associates,brand partners and communities.Specific goals that map to these commitments include:CHAMPIONING DIVERSITY2xmore Black-owned brands in our assortment by the end of 2021$4 Mdedicated to marketing support of Black-owned brands15%of our shelf space devoted to Black-owned businesses,through the Fifteen Percent Pledge$2 Minvested in mandatory quarterly in-store training for all store and salon associates to reinforce inclusivity and address unconscious bias$20 Mallocated to media investments across endemic and multicultural platforms to create more personal connections with Latine,Black and other communities100%of field,distribution center and corporate associates required to participate in Stronger Together Leadership Training SUSTAINABLE PACKAGING50%of packaging sold at Ulta Beauty will be recyclable,refillable or made from recycled or bio-sourced materials by 2025Through active management of ESG focus areas,Ulta Beauty is continuing its work to leave a positive legacy for our world.Commitments in multiple areas of ESG hold us accountable for progress.Ulta Beauty commitments at-a-glanceREDUCING EMISSIONSCommitted to set science-based emissions reduction targets with the Science Based Targets initiative2x renewable energy credits commitment in 2022EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report5Introductionleaving apositivelegacy for our worldOur Board is composed of independent directors who bring a wide variety of expertise and leadership to help guide our CEO and our management team.In 2021,we announced the appointment of Dave Kimbell as the successor to CEO Mary Dillon and executed a transition plan designed to ensure strategic and leadership continuity as we move into our next chapter of growth.Since being named CEO of Ulta Beauty in 2013,Mary Dillon developed and nurtured our inclusive culture,built an exceptional leadership team,drove significant business growth and more than tripled Ulta Beautys market capitalization.We are thankful for her commitment Board diversity 13 directors 54%(7)women 46%(6)men31%(4)racially diverse8%(1)LGBTQ 46%(6)joined within last five years Mary Dillon Executive Chair of our Board of DirectorsDelivering value for our stakeholdersCorporate governanceand leadership.Following a thorough succession planning process,in June of 2021,Mary transitioned to the role of Executive Chair of our Board of Directors and plans to serve until June of 2022.Dave Kimbell,former President of Ulta Beauty,became CEO in June of 2021 and serves on the Board of Directors.In February,2022 as part of our continuous Board refreshment efforts,we welcomed Gisel Ruiz and Kelly Garcia to our Board of Directors.Ms.Ruiz and Mr.Garcia bring extensive operating and functional expertise as well as governance and risk management experience to our Board.Dave Kimbell Chief Executive OfficerAs of February 16,2022EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report6Introductionleaving apositivelegacy for our worldOur General Counsel,Chief Risk&Compliance Officer is the executive sponsor of our ESG program and works with a cross-functional team of experts,including representatives from:Human ResourcesGrowth and Development/Energy ManagementSupply Chain and ProcurementMerchandisingStore OperationsFinance and AccountingMarketingLegal,Risk and GovernanceThis team drives ESG strategy across the four pillars and governance.In addition,we have many other associates across the company who are passionate about ESG and contribute in different ways and we welcome feedback from the investor community as well.Corporate StrategyBoard oversightUlta Beautys Board of Directors and Executive Team have overall oversight and accountability for ESG within the organization.The Board has three committees,each of which touches ESG issues in its own way:The Nominating&Corporate Governance Committeeis responsible for developing a diverse Board,and periodically reviews company policies,practices and risks regarding ESG,including risk oversight by each committee as well as the full Board.The Compensation Committeeoversees human capital risks and periodically reviews the companys diversity,equity and inclusion(DEI)policies and practices.The Audit Committeediscusses policies and practices related to cyber risks including information security and also oversees enterprise risk assessments and risk management.In addition to the oversight our committees provide,our Board provides oversight of environmental and climate risks as part of its oversight of our business operations and impact.Our Board discusses and provides guidance on ESG topics multiple times throughout the year.On a quarterly,biannual or annual basis,as appropriate,the Board reviews topics including:o Cybersecurity and technology scorecard o DEI and other human capital statistics o Updates on DEI policies and practices o Updates on Board diversity and Board succession planning o Updates on leadership succession planning o Comprehensive ESG program updates including all pillars o Comprehensive cybersecurity updates o IR shareholder engagement updates(also reported quarterly on ESG Dashboard)o Review of ESG Report o Enterprise Risk Assessment and risk policy updates including insurance o Ethics and compliance updateEnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report7Introductionleaving apositivelegacy for our worldRisk managementWe assess and actively manage risks as part of our business operations.Our Board provides guidance and oversight on enterprise risk management(ERM)activities and processes across the company.To ensure understanding of the risks we face as an enterprise,the Board receives regular management updates on our business operations,financial results and strategy.Our leadership team also keeps the Board informed about emerging or evolving risks as they arise.The Board then discusses and provides guidance with respect to risks impacting our business.As part of our ERM strategy,we proactively seek input from associates.We take a practical approach that incorporates the input of associates at all levels of the company,with special emphasis on the in-store and distribution center associates who know our guests and operations best.We are increasingly using technology to improve our approach,such as facilitating live voting and real-time data analysis of results.In addition to sharing ERM results with our Board and leadership,we also share feedback with participating associates,who appreciate knowing their input is making a difference.In 2021 we made several adjustments to our ERM risk assessment:o Used a fully virtual platform for the first time o Conducted a pre-survey of leaders that yielded additional insights about risklearn moreabout our business and governance on our Investor Relations web page.Enterprise Risk Management Why is ERM important?oSupports a strong system of internal control oHelps us manage risks and seize opportunities oComplies with regulatory guidance What does Ulta Beautys ERM team do?oFacilitates discussions about risk oGathers information and data on emerging risks o Shares findings to inform Board and management decision-making How do they engage?oRisk assessment workshops oExecutive and Board presentations oRegular check-ins with executive team EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report8Introductionleaving apositivelegacy for our worldUnleashing the power of data Data stewardshipFor Ulta Beauty,data is a source of both great opportunity and great responsibility.Using insights from guest data helps us personalize our offerings and develop products that guests love.Our customer analytics group uses data to:o Drive demand via targeted marketing o Develop merchandise insights and strategies o Support member recognition through our loyalty program o Provide guest insights to drive business objectives across our companyWe safeguard this data by monitoring and complying with privacy and consumer protection laws.While we do not sell guest data,we share aggregated and anonymized data with our brand partners and third-party vendors to enhance our business.We manage data security and privacy at the highest levels.Our Board of Directors has always actively engaged in oversight of cybersecurity,and it is part of the charter of our Audit Committee.Our CEO keeps the Board informed on cybersecurity and privacy matters via monthly reporting,regular reports to the Audit Committee and full Board discussions throughout the year.Understanding the increased prevalence of ransomware attacks on companies of all sizes,we have strengthened our data protection capabilities through investments and training.Working with third parties,we developed a heatmap of cyber risks to help us understand our areas for improvement.SecurityScorecard:A(93/100)Rating Evaluation of cybersecurity risk As of February 2022EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report9Introductionleaving apositivelegacy for our worldOversight and enablementOur Security and Network Operations Center constantly and proactively monitors our network and application landscape for threats and anomalies.We have established processes for sharing data and performing third-party risk assessment.Other recent improvements include disaster recovery planning and testing.In 2021,our entire Executive Team,including our CEO,also participated in an incident simulation exercise designed to test our readiness to respond effectively to a cyberattack.We shared what we learned from this exercise with our Board and are using those learnings to help us further mitigate risk.Ulta Beautys General Counsel,Chief Risk&Compliance Officer also serves as our Chief Privacy Officer and works closely with our internal data stewardship team,including our VP of IT Risk Management,Data Enterprise Officer and our IT Risk Management team,to ensure we take a holistic approach to caring for guest,associate and financial as well as other proprietary data.SecurityAll Ulta Beauty associates have a role as stewards of company data,and its essential that we educate them on how to keep data safe.As part of our annual Code of Business Conduct training,we train associates on:o How to keep devices and data safe in public places o How to avoid security threats and phishing scams o How to maintain a secure workplace o Everyday practices that help maintain the security of corporate digital devices,data and systemsOur security approach also includes multiple layers of defense and testing of controls.Examples of how we test our data security controls include IT-led phishing campaigns to test associates knowledge of avoiding phishing scams,and third-party-led network penetration testing done to test the security and robustness of our systems controls.EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report10Introductionleaving apositivelegacy for our worldOperating a responsible businessEthics&complianceThe Ulta Beauty Code of Business Conduct helps us work ethically and transparently in support of our mission,vision and values.All associates,officers and members of our Board of Directors are expected to act in accordance with the Code of Business Conduct.It is included in new hire materials for all associates,who must read and acknowledge this policy each year.In addition,all store managers and above in the field,distribution center managers,corporate associates and members of the Board of Directors take an annual training course on the Code of Conduct.We also maintain Ulta Vendor Standards,which outline our expectations of all Ulta Beauty vendors.These cover the ethical conduct and social and environmental compliance standards that are required of a responsible workplace.We encourage associates to speak up to report any violations of the Code of Business Conduct.There are several ways to report a concern:o Speaking with ones own manager or another manager o Speaking to a Human Resources Business Partner o Contacting the We Care!Lets Talk line,by email or phone o Calling our third-party Ethics Hotline anonymously by phone or reporting online o Contacting our Chief Compliance Officer Our policy on political contributionsPolicy on Political Contributions:Our Code of Business Conduct lets associates know that while we respect their right to be engaged in personal political activities,they have a responsibility to do so on their own time with their own resources.Ulta Beauty does not contribute directly or indirectly to political parties,candidates or campaigns,or religious affiliations.EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report11Introductionleaving apositivelegacy for our worldOur Ethics Hotline is managed by Human Resources,and our General Counsel,Chief Risk&Compliance Officer also reviews all concerns.Ulta Beautys Board receives formal updates on ethics and compliance matters once per year.Each quarter,a cross-functional team comprised of representatives from HR,Loss Prevention,Internal Audit and Legal,Risk&Governance Services meets to discuss reporting trends and share the status of investigations and outcomes.Trends we identified in 2021 included:o No increase in Ethics Hotline complaints o No degradation in compliance,despite continued operational challenges and an ongoing remote work environment for corporate associates o Decrease in reports related to employee relations and wage and hour issues,likely due to the transfer of call volume to our HR Service CenterUlta Compliance NetworkWe continually strive to improve our approach to compliance through the Ulta Compliance Network(UCN),a group of associates who regularly focus on compliance.The group meets quarterly and provides a way for associates to share best practices,discuss challenges and identify useful tools or resources,such as our recently developed Compliance Dashboard.In 2021,our CEO,CIO and CHRO each joined the UCN to discuss their perspectives on and commitment to compliance as well as to take questions directly from UCN members.EnvironmentProductPeopleSupplemental DataCommunity2021 ESG Report12Introductionleaving apositivelegacy for our worldGrowth at every levelDevelopment programs for all associates,including new programs on critical thinking and inclusive conversations,provide opportunities to grow.77%score on associate engagement survey,five points higher than industry benchmark.*2021 Voice of the Associate Survey through Glint Inc.Bold new commitmentsOur Diversity,Equity&Inclusion(DEI)commitments focus on brand amplification and support;assortment growth;and fair,equitable,and unbiased guest and associate experiences.2021 HighlightsPeopleWe champion inclusion and opportunity in beauty for all.And we want all associates to feel that they belong at Ulta Beauty and can be their true,authentic selves.2021 ESG Report13PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldUlta Beauty has long prioritized DEI efforts within our business strategy,mission and values.These values are in our DNA as we work to ensure all guest experiences are inclusive,every associate feels they belong and are connected to and reflected at Ulta Beauty.In the past years,we have significantly matured our DEI efforts.We embed DEI throughout Ulta Beauty via Project Embrace,our cross-functional approach to ensure teams remain energized and motivated to lead in this critical space,integrating DEI into all that we do.Launched in 2020,the project is chaired by our CEO and includes more than 60 associates who drive and execute our plans.Diversity,Equity&InclusionChanging how the world sees beautyInternally,we work to foster an inclusive,bias-free workplace for our 40,000 associates.Externally,weve committed to focusing on brand amplification,assortment growth and equitable guest and associate experiences.To create meaningful change,Ulta Beauty is committed to:o Amplifying underrepresented voices o Curating and nurturing a diverse assortment o Creating exciting,welcoming guest experiences o Fostering equitable associate experiences 1 in 3Black women feel discriminated against by the beauty industry*$50 Mcommitted toward 2022 DEI investments$25 Min DEI investments spent in 2021*Ulta Beauty Black Consumer Research-Pepper Miller,20182021 ESG Report14PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldCreating an inclusive workplace for associatesAn inclusive,bias-free and equitable workplace enables all associates to be celebrated for who they are and to reach their full potential.In 2021,we transformed associate experiences through behavioral inclusion in our recruiting,training and education efforts.Those efforts tangibly came to life in ways such as:o Inclusive Recruitment Strategies:Standardized the number of interviewers and interview questions asked in screenings to create a consistent experience for all candidates;ensured at least two diverse individuals are considered for corporate roles where gender or ethnicity are underrepresented in director and above roles.o Created and Launched Our Inaugural Diversity Week:Dedicated time to celebrate intersectionality and types of diversity that arent formally recognized at other parts of the year,such as intergenerational diversity and disability awareness.o Introduced Stronger Together:A 21-day challenge for associates to build personal habits through everyday inclusive actions.o Invested$2 Million in Inclusion in Action:Mandatory quarterly in-store training for all store and salon associates and leaders on topics including unconscious bias,creating equitable shopping experiences and building trust and empathy.o Established Diverse Leaders Program:Leadership-led program to empower,inspire and educate high-potential diverse associates.DEI Recognition Forbes Best Employers for WomenForbes Best Employers for DiversityDiversityInc 2021 Noteworthy Company for DiversityDiversity at Ulta BeautyAs of January 29,2022Ulta Beauty AssociatesIn 2021:39%diverse hires across all corporate associatesUlta Beauty leadership (director level and above)consists of 65%women and 25%people of color50%diverse hires at the director level and above2021 ESG Report15PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldToday,Ulta Beauty is proud that 25%of leadership(director level and above)are people of color,and we believe that we can improve even further.We actively assess data,recruiting and promotional processes to build the infrastructure,platforms and processes needed to set goals and hold ourselves accountable to increasing representation in management.In 2022 and beyond,we will keep a focus on inclusive leadership as well as behavioral and structural inclusion as we nurture our culture and ensure all associates can reach their full potential.We remain committed to retaining,developing and attracting diverse talent.This year,we will:oReimagine the Diverse Leaders Development Program to double the number of associates and include expanded external partner expertise,dedicated trainings as well as CEO and executive mentorship for future company leaders oSignificantly invest in incremental efforts to support our diverse slate recruitment efforts o Continue to acknowledge and celebrate lived experiences with always-on DEI internal programming that includes dedicated workshops,panels,keynote speakers and educational programming for key moments such as Pride Month,Black History Month and Asian Pacific American Heritage Month,among others Closely intertwined with associate experiences are the guest experiences that come to life daily in our stores and online.Guest-centricity is core to Ulta Beautys success.We continue to invest in the communities we serve and our trainings to prioritize inclusivity with every guest engagement.oNew this year,the Ulta Beauty Charitable Foundation will donate$2 million to BIPOC and LGBTQ -focused nonprofits with volunteering and education opportunities for associates.oInclusion in Action,the quarterly,in-store training launched in 2021 to reinforce inclusivity and address unconscious bias,will now be mandatory for distribution center and corporate associates in addition to a second year of curriculum for salon and store associates.This accounts for a$2.5 million investment,in addition to the existing company trainings,and will result in a minimum 3.5 hours of required DEI training for all associates.oTextured hair and shade-matching education trainings will be further enriched across every Ulta Beauty salon.2021 ESG Report16PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldSince announcing our 2021 commitments,we have made significant strides to amplify our DEI efforts,internally and externallyand we know the work is far from complete.The beauty category is emotional,personal and deeply connected.Our dedication to this work ensures those attributes remain at the heart of the beauty community,giving way to welcoming,equal experiences for every Ulta Beauty associate,guest and partner.”Dave Kimbell Chief Executive OfficerBeyond our workforce,Ulta Beauty can influence our industry and world with meaningful DEI efforts.As a retailer offering goods and services that shape trends and deliver beauty for all,we recognize our responsibility to be part of the conversation around who is represented in beauty and who has a seat at the table.Amplifying underrepresented voices We recognize the importance of elevating,celebrating and consistently supporting the influence underrepresented voices bring to the beauty industry.To celebrate these changemakers externally,this year we will:o Dedicate approximately$25 million in media investments with multicultural platforms to nurture personal connections with Latine,Black and other multicultural beauty enthusiasts.Notably,10%of this investment will be directly spent with Black-and Latine-owned media outlets,outpacing media industry benchmarks.This reflects a$5 million increase from 2021.oBuild upon our widely proclaimed MUSE platform that launched in 2021 to magnify,uplift,support and empower Black voices in beauty.As part of last years programming,we revealed the MUSE 100,a celebration of 100 Black changemakers in beauty who received$10K grants to further their impact.oInvest$8.5 million to brand marketing support for Black-owned,Black-founded and Black-led brands within the companys assortment,more than doubling last years investment to reflect the retailers expanded Black-owned assortment.Curating and nurturing a diverse assortment In 2021,Ulta Beauty proudly joined the Fifteen Percent Pledge.This year,we will continue building upon our work to help diverse leaders,founders and entrepreneurs thrive in the beauty industry with the following efforts:o We will launch a Brand Partner Accelerator Program focused on early-stage BIPOC beauty brands.Ulta Beauty will provide time,resources and mentorship to educate,inspire and support accelerator participants with brand development for retail readiness.oTo offer founders of color greater access,capital and expertise,the company will invest$5 million in New Voices,a venture capital firm that partners with and invests in entrepreneurs of color to drive scalable,sustainable businesses and create generational wealth.As the VCs beauty retail partner,Ulta Beauty will provide priority access to shelf space,merchandising and marketing support.o The company will allocate$3.5 million to in-store merchandising support so guests can more readily find the Black-owned,Black-founded and Black-led brands within the Ulta Beauty assortment.With a formalized internal governance in place across the enterprise,Ulta Beauty is committed to progress and will share updates as we continue to build upon our diversity,equity and inclusion efforts.Additionally,Tracee Ellis Ross will continue in her role as our external DEI advisor.We take great pride in these efforts and will continue to prioritize them and remain accountable to all of our guests,associates and the communities we serve.2021 ESG Report17PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldCreating a great place to workCulture at Ulta Beauty Our culture has seen us through the challenges of the pandemic.We strive to make Ulta Beauty a great place to work by leading with heartcaring for each other in everything we do and demonstrating integrity,authenticity and inclusivity in our daily actions.We continue to be grounded in our mission,vision and values,as well as our rally cry of“Bigger,Better,Together”:o BiggerBuilding on our strong core with a disruptive and innovative mindset,using break-through and creative thinking to drive sustainable growth.o BetterDriving operational excellence and efficiency that allow us to grow o TogetherWe are one Ulta Beauty focused on our culture and values to drive results.MissionEvery day,we use the power of beauty to bring to life the possibilities that lie within each of usinspiring every guest and enabling each associate to build a fulfilling career.VisionTo be the most loved beauty destination of our guests and the most admired retailer by our Ulta Beauty associates,communities,partners and investors.Valueschampiondiversitylovewhat you doown you doimprovealwayswintogethergive wowexperiencesdowhatsright2021 ESG Report18PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldThis focus has guided us as we transition to new leadership,including a new CEO,Dave Kimbell.We also welcomed Kecia Steelman,previously our Chief Store Operations Officer,as Chief Operating Officer.Store and DC operations report to Kecia and she is a champion of our winning culture.While the COVID-19 pandemic presented challenges for some of the in-person visits and events that would typically be scheduled,it also provided a new way for our executive leaders to connect with more associates and more often than ever!Dave,Kecia and their leadership teams were thrilled to be able to accommodate more regularly-scheduled touchpoints with teams across the country without the constraints of travel and to allow a larger number of attendees at various events,including town halls and DEI focus groups,throughout the year with the new virtual capabilities.Two-way communication remains a hallmark of how we understand and strengthen the Ulta Beauty culture.We regularly conduct an associate engagement survey to take the pulse of associates satisfaction with their roles,their leaders and the company as a whole.Overall,we saw a very high favorability score,with areas of strength including a sense among associates that the work they do matters and they can be their true selves at work.Areas for further development included barriers to execution for our corporate group and associate well-being for our field groups.We have plans in place to address each of these findings.One way Ulta Beauty attracts and retains associates is through our benefits offerings.We support work-life balance with benefits like tuition reimbursement and flexible scheduling.While businesses in many industries have experienced workforce shortages,we are proud and fortunate to be in a fun and appealing sectorwith a team that is passionate about all things beauty.Our commitment to open and honest communication has been central to the positive work environment at Ulta Beauty,especially for our store associates and field leaders who feel empowered to share feedback with confidence knowing it will be truly heard by their corporate partners and our leadership team.”Kecia Steelman Chief Operating Officer2021 ESG Report19PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldBuilding fulfilling careers Ulta Beauty offers inspiring career paths for professionals at every level,with leadership development programs that prepare promising future leaders for new levels of responsibility.In fact,across the company,the majority of our promotions are internal.Here are a few of the ways we provide associates with knowledge and help develop their skills along their career journeys.Individual development plans Associates can work toward the career goals they choose and use a learning management system that houses training on role-specific skills,interpersonal skills and more.Ongoing training Continuous learning includes opportunities to learn about new product lines,enhance sales skills or discover ways to make all store guests feel welcome.The Way We Work This new development series helps corporate associates work smarter and better together,empowering them with knowledge and skills such as critical thinking,navigating conflict and engaging in inclusive conversations.Director Leadership Development program This program enables director-level talent to contribute to our culture and business results.It empowers participants to lead with both their head and their heart,keeping Ulta Beautys mission,vision and values in mind.Diverse Leaders program Through this program,now in its second year,Ulta Beauty officers mentor high-potential senior managers and directors,with a specific focus on diverse talent.Field leadership conference This program typically brings together thousands of general managers to connect and build their skills.For the first time,the conference was all-virtual in 2021.Mentorship program We introduced a mentoring program in 2020 through which Ulta Beauty leaders mentor more junior associates.The program focuses on self-awareness,driving business results,agility and people development and is chaired by our CEO.Orientation Onboarding takes a variety of forms across our stores,distribution centers and corporate office.All new associates get an introduction to Ulta Beautys mission,vision and values.2021 ESG Report20PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldOur associates well-being,inside and outside of work,is one of our highest priorities.Ulta Beauty protects associates safety and offers a suite of benefits that affirms and supports all that associates contribute every day.Ulta Beauty associates work not only in retail stores,but also in distribution centers and corporate offices.Our recordable injury rates are below industry averages for both the retail and distribution center sectors.Across all locations,associates receive instruction on how to keep themselves and guests safe.Many associates receive training that is specific to their roles.For example,all store managers receive hazardous waste training,and salon professionals are trained in the safe handling of chemicals.In distribution centers,all associates who implement hazardous waste programs receive training.Each of these training Caring for each other Safety and well-being programs meets or exceeds applicable state and federal regulatory standards.Ulta Beauty received no fines or penalties from the Occupational Safety and Health Administration(OSHA)in 2021.Caring for associates well-being takes many forms,including:o Comprehensive health care plans for eligible associates o An Associate Assistance Program that connects associates with online resources,meditation tools and access to one-on-one counseling o Financial wellness planning and guidance o Health apps and educational resources for soon-to-be parents o Annual memberships to a meditation tool for corporate associates o Training on wellness,mindfulness and inclusion through a new partnership2021 ESG Report21PeopleIntroductionEnvironmentProductSupplemental DataCommunityleaving apositivelegacy for our worldOmnichannel educationNew signage at the brand level in Ulta Beauty stores indicates brands certified by Conscious Beauty at Ulta Beauty.Online,guests can filter at the SKU level.270 brandscertified to one or more of the Conscious Beauty at Ulta Beauty pillars.60%of beauty consumers buy or want to buy clean beauty products.*Source:Ulta Beauty proprietary research 2019Less single-use plasticthanks to Ulta Beauty Collections embrace of post-consumer recycled content.2021 HighlightsWe empower guests to make more informed and sustainable product choices.ProductAs of January 29,20222021 ESG Report22ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldSince our founding more than 30 years ago,Ulta Beauty has envisioned being the premier destination for beauty lovers.In 2021,we refreshed our strategic framework to one that is emotionally connected and culturally relevant for todays consumers.Fulfilling that aim today requires that we not only offer“All Things Beauty,All in Your World,At the Heart of the Beauty Community”but that we also offer new ways to access our products,such as“buy online,pickup in store”,two-hour pickup and a pilot of same-day-delivery.It also means that we serve and celebrate all beauty enthusiasts.Our product assortment in stores and at reflects the diversity of our guests.We are continually growing our assortment to appeal to Black and Latine beauty enthusiasts,who have not always been well served by the beauty industry.To serve and empower all guests with the power of beauty,we engage in conversations with almost 10,000 beauty enthusiasts through polls,surveys and online discussions.One destination for all things beautyUlta Beauty products and services The Wellness ShopGiven the growing focus on self-care in all aspects of life,its no surprise that 65%1 of consumers see the beauty category as being significantly connected to wellness.In response to this trend of“beauty as wellness,”Ulta Beauty launched The Wellness Shop in select stores and online.The Shop offers a curated assortment of products across five categories:oEveryday care oSupplements and ingestibles oRelax and renew oDown there care oSpa at home1Ulta Next Better proprietary consumer research as of June 2021.2021 ESG Report23ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldEngaging with brand partners and vendors Hundreds of brand partnerships make our breadth of products possible.We work with both large beauty brands that have well-established supply chain infrastructures,and up-and-coming brands that may need extra guidance.The visibility of the Ulta Beauty brand provides a platform for other brands to succeed.The SPARKED at Ulta Beauty program,which features a rotation of emerging brands throughout the year,enables emerging brands with inspiring stories to showcase their products in a larger setting.We provide suppliers with our Ulta Vendor Standards,which outline our expectations for ethical business conduct,worker safety,environmental protection and products.Our supplier relations team onboards new brands and vendors,using webinars and other tools to educate them on how to succeed with us,and,for diverse-owned vendors,how to earn diverse supplier certification.We expect vendors to not only abide by our standards,but also pass them along to their own vendors engaged in the production of goods or services that we ultimately purchase.Vendors who develop Ulta Beauty Collection products sign a manufacturing agreement as well as a social compliance agreement.In addition,factory inspections and third-party audits are conducted to evaluate work practices as appropriate.Ulta Beauty offerings PRODUCTS oCosmetics oFragrance oHaircare oSkincare oBath and body products oSalon styling tools SALON SERVICES oHair cut,color,treatment and styling oLash applications oMakeup oBrow and wax services oEar piercing 2021 ESG Report24ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldBeauty simplified.Inspiration endless.Ulta Beauty CollectionUlta Beauty Collection Development ProcessDraft product briefs based on research into emerging trends and guests needs.Present product brief to a vendor.Vendor develops a unique formulation based on our specifications for color,fragrance and performance.Ulta Beauty Collection team evaluates and provides feedback on products and packaging,from confirming that mascara brushes resist clumps to ensuring that pump bottles dispense just the right amount of product.Ulta Beauty Collection tests to ensure formulas and packaging are thoroughly validated to satisfy the product concept and ensure it meets safety standards.In 2021,we conducted research to strengthen the position of Ulta Beauty Collection and position the brand for future growth.Gen Z and younger Millennials are open to an emotional connection to the brand and are interested in products that are easy to use,and they provide guidance on new trends.We are developing new products and communication strategies with these insights in mind.For example,we are creating makeup and skincare designed for younger consumers and available in a diverse range of skin tones.Knowing that younger generations especially value our Conscious Beauty at Ulta Beauty pillars,we are emphasizing clean ingredients,vegan products and our PETA-certified,cruelty-free portfolio.Ulta Beauty Collection is also working toward alignment to the Sustainable Packaging pillar of Conscious Beauty at Ulta Beauty.We have already transitioned to 100%post-consumer recycled(PCR)bottles and jars for the lines bath products.In 2021,we evolved our approach to ensure we are assessing progress in a measurable,repeatable and credible way.Instead of measuring simply the number of products that incorporate sustainable packaging,we are transitioning to a volume-based approach that will allow us to determine how much plastic is being reduced overall.Working with a third-party consultant,we are gathering information on which plastic reduction opportunities will have the greatest impact.2021 ESG Report25ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldProducts that benefit people and the planet Conscious Beauty at Ulta BeautyTMIt has been more than a year since we launched Conscious Beauty at Ulta BeautyTM,our holistic approach to educate,guide and simplify the landscape of clean ingredients,ethical practices and environmental benefits for Ulta Beauty guests.Our research indicates that consumers,particularly younger consumers,are interested in products that are safer for the planet and that are free from substances of concern.While there is clear consumer demand for cleaner products,in the past,there was no broadly agreed-upon definition of what clean beauty really meant.Nor has there been a good way to evaluate clean ingredients alongside other priorities,such as animal welfare or environmental sustainability.Conscious Beauty at Ulta BeautyTM helps to demystify this complexity,allowing guests to choose the beauty products that meet their needs and align to their personal values.oCertification by brands:Brands are certified to the Conscious Beauty at Ulta Beauty pillars through an online portal powered by ClearForMe,a leader in the clean beauty space that manages the most comprehensive ingredient database on the market.oSKU level information for guests:Guests can discover certified brands through filtering of products at the SKU level on the Conscious Beauty website.oIn-store signage:In-store,we use signage to indicate participating brands.2021 ESG Report26ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldThe five pillars of Conscious Beauty at Ulta BeautyTM CLEAN INGREDIENTSBrands whose products exclude parabens,phthalates and other ingredients on our Made Without List,which was developed with consideration for the human and environmental health impact of ingredients.We continue to monitor the landscape of trusted ingredients and ingredients of concern and will evolve the Made Without List over time.All Ulta Beauty Collection products are certified to this pillar,and brands can certify their products at the SKU level.CRUELTY FREEBrands that do not conduct animal testing.Our definition is tied to existing cruelty-free certifications,including PETA,Leaping Bunny or Choose Cruelty Free.Our entire Ulta Beauty Collection line of products was recently certified cruelty-free by PETA.132VEGANWhile cruelty-free refers to testing,vegan refers to ingredients.Vegan products are free of animal products,animal byproducts and animal derivatives.We are in the process of certifying Ulta Beauty Collection products as vegan at the SKU level.4SUSTAINABLE PACKAGINGTo qualify for our Sustainable Packaging pillar,at least 50%of a brands product packaging must be made from recycled or biosourced materials or be recyclable or refillable.We continue to incorporate How2Recycle labels to provide clear guidance on how best to recycle products at end of use.Internally,we are making progress toward our goal by transitioning to 100%PCR bottles and jars for Ulta Beauty Collection everyday bath products and 30%PCR for cosmetic compact lids.5POSITIVE IMPACTBeauty brands give back in so many ways.While we do not certify brands for their alignment with this pillar,we are proud to use our platform to highlight brands whose philanthropic efforts are critical to their DNA.2021 ESG Report27ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our worldPackaging encompasses multiple components,and not all brands collect and report data in the same way,making it complicated for us to assess our progress.We are working with a third party to help us build the foundation and infrastructure to confirm progress and compliance.This work includes aligning on the baseline data needed from certifying brands and developing a process for collecting and verifying submissions.We will also provide communication and training to certifying brands to support their submissions.Ultimately,we hope to transition to a volume-based(rather than a SKU-based)measurement approach for all brands,as we have done for Ulta Beauty Collection.This work is underway and will continue throughout 2022.We expect to share an update on our work and how brands are progressing toward our goal in 2023.Embracing innovationUlta Beauty continues to explore ways to reduce packaging use.For example,we recently concluded a 6-month pilot with Loop,a reusable packaging pioneer owned by TerraCycle.We launched a microsite through which guests could place orders for products packaged in reusable containers.When guests were finished using the product,they returned the containers,which were then cleaned and refilled to be used again.We are currently analyzing the results of this pilot and determining our path forward.Resonating with guestsAs of January 29,2022,270 brands are participating in the Conscious Beauty at Ulta BeautyTM program.Pillar certification seems to increase guest interest:the more pillars that a brand is certified for,the stronger its performance as compared to past years.The platform continues to evolve.A consumer insight survey,conducted in 2021,will allow us to further refine Conscious Beauty at Ulta BeautyTM to meet guests needs and expectations.We will also evolve the platform with the guidance of the Conscious Beauty Advisory Council.The Council brings together a diverse set of leaders at the forefront of clean beauty,product development,packaging sustainability and brand leadership who act as trusted advisors.Progress on sustainable packaging By 2025,50%of packaging sold at Ulta Beauty will be recyclable,refillable or made from recycled or bio-sourced materials.This goal includes both Ulta Beauty Collection and other brands sold.Celebrating brands positive impactThe Positive Impact pillar of Conscious Beauty at Ulta Beauty allows us to celebrate brands with giving back at their core.One such brand is Lake&Skye,a fragrance brand that plants a tree for every order it receives.Lake&Skye also uses packaging that is Forest Stewardship Council-certified.2021 ESG Report28ProductPeopleIntroductionEnvironmentSupplemental DataCommunityleaving apositivelegacy for our world EnvironmentWe strive to protect the beauty of our natural environment.Formal commitmentTo setting an emissions reduction target in accordance with the terms of the Science Based Targets initiative(SBTi)2xDoubling renewable energy credits in 2021 and doubling them again in 2022$1.6 Minvested in energy management system retrofits14,800tons of waste diverted from landfill2021 Highlights 2021 ESG Report29EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our worldUlta Beauty strives to operate in an environmentally responsible manner.We have been implementing sustainability initiatives in our stores,distribution centers and corporate offices for years.At the same time,we recognize that the vast majority of our emissions occur outside of our direct footprint.Today,our retail stores are the focus of our energy reduction efforts.Our Corporate Energy&Sustainability Team focuses on managing energy use and conserving resources across millions of square feet of real estate.The average Ulta Beauty store is approximately 10,000 square feet,with roughly 950 square feet devoted to full-service salon space.Like many other companies,we face the challenge of minimizing our environmental footprint as our business Sustainability in-store and beyondManaging our footprintgrows.At the same time,some of the sustainability challenges we face are uniquely tied to our business modela comprehensive beauty destination with a full-service salon in close proximity to shopping areas.Here are a few of the factors we consider as we manage our stores footprint:o Maintaining safe indoor air for all customers even while hairsprays,dyes and other products are in use in our salons o Using adequate and energy-efficient lighting to help all of our products look their best o Managing in-store temperatures,considering changing weather,open-concept store designs and guests who may have wet hair or have removed layers for salon treatments o Making efficient use of water needed for our salon services2021 ESG Report30EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our worldReducing our carbon impactEnergy&emissions Approximately 99%of our stores make use of an energy management system(EMS),which helps us actively conserve energy while saving on annual operating costs.EMS technology has changed over time,creating additional opportunities for efficiency,which is why we spent$1.6 million in 2021 on EMS retrofits.These systems offer the following benefits:oTemperature control oLighting management during and outside of retail hours oEarly detection of malfunctioning equipment oShifting or reducing electricity usage during peak periods,helping to stabilize the electric grid and lowering our utility bills oAdvanced analytics,including fault detection,diagnostics and optimization$5.5 Minvestment in lighting upgrades for100stores509 MWh estimated savings of energy per year Energy consumption FY17FY21Comp Store1 Net kWh reduction/increase in millions FY17 -3.1 FY18 -1.7 FY19 -0.9 FY202 -45.7 FY213 31.9Year-over-Year /-Projected investments for 2022.Protecting people and the environmentThe pandemic posed additional complexity for managing the efficiency of our stores.With decreased foot traffic during store closures in 2020,we had less need for cooling and dehumidification.Now that stores and salons have fully re-opened,we have lowered cooling setpoints,increasing comfort for masked associates and guests.Based on CDC recommendations,we have also upgraded our air filters and increased our fresh air intake,which will increase our HVAC load.As we continue to open new stores and adapt to life with COVID-19,we will seek out efficient technology and apply best practices for continuous improvement.1 Electricity consumption in comparable stores.This compares annual electricity consumption against the same stores prior performance(i.e.,increased consumption from additional store openings is removed from this comparison).2 Decrease primarily due to temporary store closures and reduced operating hours due to COVID-19.3 Data through October.Increase primarily due to restoration of store operations under slightly reduced hours.2021 ESG Report31EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our worldEfficient equipmentUpdates to in-store lighting and HVAC have been another focus of our investments over the past year.In 2021,these initiatives included:oUpgrading compact fluorescent bulbs to LEDs in 100 Ulta Beauty stores oInstalling LEDs in all new store construction oContinuing to use 100%LED lighting at our corporate headquarters in Bolingbrook,Illinois oEquipping all new stores with HVAC units that exceed industry efficiency standards oIdentifying opportunities for early retirement of aging and inefficient equipment at existing stores on an annual basis.During the past year,we replaced HVAC equipment at 17 stores and completed variable frequency drive retrofits at an additional 16 stores.In 2022,we expect to upgrade an additional 100 stores and one distribution center to LED lighting,remodel 12 stores and retrofit HVAC systems at 50 stores.Embracing clean energyUlta Beauty is a proud user of renewable energy,and our efforts have earned us recognition as a Green Power Partner by the U.S.Environmental Protection Agency(EPA).The Green Power Partnership is a voluntary program that encourages organizations to use green power to reduce the environmental impacts associated with conventional electricity use.22,640 MWhwind energy purchased through renewable energy credits in 2020Renewable Energy Highlights16%of company annual electricity usage met through renewable energy credits in 2021,double the percentage that was met in 2020.We expect our usage of renewable energy credits to double again in 2022.FY19-21 energy consumption grid vs.renewableWe continued to purchase renewable energy credits(RECs)from a wind farm in McCullough County,Texas,and have made additional investments in residential solar projects that offer tax credits to homeowners.Sustainability in our supply chainReducing the overall energy and emissions impact of our business goes beyond what happens in our stores.It extends to indirect emissions categories such as the transportation and distribution of our products.Ulta Beauty is exploring ways to reduce the carbon emissions associated with the packaging,handling and transport of our products,such as consolidating shipments and using EPA SmartWay-certified carriers.We are preparing to conduct due diligence with our brand partners and other vendors to better understand their emissions.Better understanding these emissions sources will allow us to set a Scope 3 emissions reduction goal.Participation in a community solar program,with 13 stores and a distribution center enrolled for a 100%renewable match 2021 ESG Report32EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our worldUnderstanding Ulta Beautys emissions Greenhouse gas emissions are organized according to three“scopes.”While Scope 3 emissions make up the largest percentage of our footprint,Scope 1 and 2 emissions are more within our control.We take a distinct approach to managing each of these emissions scopes,and our forthcoming science-based target will cover Scope 1,2 and 3 emissions.SCOPES 1&2DEFINITION Emissions directly from our operations(Scope 1)or from the electricity we purchase(Scope 2)PORTION OF OUR FOOTPRINT 5%HOW WE MANAGE oUpgrading HVAC systems in our stores oUsing state-of-the-art energy management systems oInstalling energy-efficient lighting oPurchasing renewable energyDEFINITION All indirect emissions in our value chain,both upstream(among our suppliers)and downstream(during transportation,product use and end of life)PORTION OF OUR FOOTPRINT 95%HOW WE MANAGE oConsolidating shipments o Using SmartWay-certified carriers for shipping o Conducting research on the emissions impact of in-store vs.e-commerce ordersSCOPE 3Within our Scope 3 footprint,currently,96%of our emissions result from four out of 10 categories:SCOPE 3:UPSTREAMTRANSPORTATION&DISTRIBUTION 2019:3%|2020:8%The shipping of products from distribution centers to Ulta Beauty storesPURCHASED GOODS&SERVICES 2019:50%|2020:46%Emissions involved in creating the products we carry,as well as activities such as marketing and professional servicesSCOPE 3:DOWNSTREAMTRANSPORTATION&DISTRIBUTION 2019:18%|2020:15%Customers traveling to and from Ulta Beauty retail storesUSE OF SOLD PRODUCTS 2019:23%|2020:27%The emissions resulting from customers using Ulta Beauty products,such as hair styling tools that require electricity to operate and hairspray products that contain propellant gases that are GHGs2019 Scope 1 7,731(0.3%)Direct Emissions Scope 2 133,889(4.8%)Indirect EmissionsScope 1,2 and 3 (limited)1 emissions(tCO2e)2,32020 Scope 1 6,815(0.3%)Direct Emissions Scope 2 107,611(4.5%)Indirect Emissions2019 Scope 3 2,648,444(94.9%)Indirect Other Emissions 2020 Scope 3 2,251,490(95.2%)Indirect Other Emissions 1 “Limited”means not all scope 3 categories are included.Our decreased Scope 1 and 2 emissions in 2020 were due in part to store closures during the pandemic.This data has not been assured.2 Organizational Carbon Footprint FY20 by EcoAct3 Organizational Carbon Footprint FY19 by EcoAct2021 ESG Report33EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our worldWe are continually looking for new ways to reduce our impact as our business grows.Beyond improving the sustainability of our products through Conscious Beauty at Ulta Beauty,we recognize our responsibility to conserve water and minimize waste where possible.Making water go furtherWhile retailing is generally not a water-intensive business,our demand has increased in recent years as our salon services have grown.We continue to seek ways to manage our stores water footprint,such as by transitioning from traditional to instant water heaters that reduce water use and gas consumption.In 2021,we completed proactive water heater replacements at 48 stores,seven of which received units equipped with ultra-low nitrogen oxide burners.Ulta Beauty also engages a vendor that proactively identifies potential leaks or malfunctioning equipment by comparing water consumption year over year,enabling us to identify issues and make repairs quickly.Sending less to landfillAll Ulta Beauty stores can dispose of general waste and recycle cardboard.While plastic recycling capabilities vary across the country,110 stores are currently participating in a single-stream recycling pilot that allows them to recycle certain types of plastic.We estimate that about 48%of our waste is diverted for recycling,and in 2020,our stores and distribution centers recycled more than 12,348 tons of cardboard and plastic shrink wrap.A unique waste stream we must manage is beauty products that,for a variety of reasons,cannot be sold and must be disposed.Certain products are considered hazardous waste,due to the possibility of chemicals mixing and will provide our beauty retail perspective with Consortium partners as they determine which solutions to implement in 2022 and beyond.potentially creating a harmful substance.Ulta Beauty complies with all local,state and federal environmental laws for the responsible management of these materials.Items that are regulated as hazardous waste are not sent to a landfill.In 2020,stores and distribution centers diverted 2,292,946 pounds of hazardous waste from landfills.As part of our focus on sustainable packaging in our Conscious Beauty at Ulta Beauty program,we are exploring new ways to decrease our demand for materialsand by extension,the waste we generate.We recently joined 13 other leading retailers as the Beauty Sector Lead Partner in the Consortium to Reinvent the Retail Bag.The Consortium,through its Beyond the Bag Initiative,will identify,test and implement solutions that more sustainably serve the purpose of the single-use plastic retail bag.Ulta Beauty Maintaining the beauty of our environmentWater&waste1 Waste management reporting and distribution center self-reporting.Tons of waste diverted from landfill1(In Thousands)2021 ESG Report34EnvironmentProductPeopleIntroductionSupplemental DataCommunityleaving apositivelegacy for our world$5.35 M donated to the Breast Cancer Research Foundation in 2021We improve the lives of women and families in our communities.CommunityUsing our expertise for impact Many Ulta Beauty leaders serve on nonprofit boards of directors.In 2021,we focused on placing diverse leaders with local nonprofits in the Chicago area.$2.4 Mraised for Save the Children,which helped them provide 800,000 meals to families in need121grants provided through the Associate Relief Fund to associates facing financial hardship following unforeseen events2021 Highlights 2021 ESG Report35EnvironmentCommunityProductPeopleIntroductionSupplemental Dataleaving apositivelegacy for our worldAdvancing our impact in communitiesThe Ulta Beauty Charitable FoundationDRESS FOR SUCCESS oDonated nearly$1 million since 2017 to help women achieve economic independence oHeld virtual career coaching and mentoring sessions where we connected clients with job openings at Ulta Beauty,as well as provided general interviewing and job search advice oProvided Board leadership through our Senior Vice President of Store Operations,Kelly Cusick-DropchinskiBREAST CANCER RESEARCH FOUNDATION o Increased our donations from the previous year to$5.35 million ,for a cumulative total of$42 million since 2009 o Set a goal to fund 1 million hours of breast cancer research by 2024,equivalent to$50 million in funding o Held our second Beauty on the Move,a virtual fitness event that raised funds and encouraged associates to stay healthy o Currently fund 19 researchers across three countries,two of whom recently published results of the first large,multicenter study to improve the accuracy of breast cancer risk assessment by identifying gene mutations for women without a family history of the diseaseSAVE THE CHILDREN oDoubled our fundraising compared to 2020,raising$2.4 million to help feed families and keep children learning in the U.S.oPurchased over 2,000 books celebrating diversity,which were distributed to children learning from home during the pandemic oProvided free haircuts,treatments and skin services to Save the Children employees as a token of our appreciation for all they do to care for our underserved communities oAllocated funding to buy supplies in India during the COVID-19 surge there Relief when associates need it mostThe Associate Relief Fund provides monetary grants to associates facing personal hardship.With the increase in natural disasters that have occurred in recent years,we are seeing a growing number of applications from associates affected by these crises.For example,many associates in Louisiana were affected by Hurricane Ida,the states second most destructive hurricane in history.As of mid-December 2021,we issued 121 grants to associates specifically for emergency shelter,insurance deductibles and other immediate needs as a result of unforeseen situations.In 2021,the Ulta Beauty Charitable Foundation(UBCF)continued our strong support of our three national partners.We support each partner in different ways,which may include monetary and in-kind donations,Board leadership and volunteer service.UBCF has its own board made up of Ulta Beauty executives who help set policy and direction for the Foundation.For the first time in 2022,UBCF will donate$2 million to BIPOC and LGBTQ -focused nonprofits,while offering volunteering and education opportunities for associates.2021 ESG Report36EnvironmentCommunityProductPeopleIntroductionSupplemental Dataleaving apositivelegacy for our worldSupporting diverse communities near and far Hometown giving and new partnersWhile UBCF remains focused on supporting women and families,we are increasingly broadening our support to include organizations fighting for racial equality and that serve BIPOC and LGBTQ communities.Racism,homophobia and other forms of discrimination affect millions of women and young people,and we recognize the need for an intersectional approach.We are doing this by:o Surveying our community partners to better understand their DEI commitments and strategies o Increasing our investments in groups that work with underserved communities,such as Big Brothers Big Sisters Chicago and Metropolitan Family Services o Matching Ulta Beauty leaders,many of whom are diverse,with seats on nonprofit boardsRecent collaborations include:o Step Up,a partner focused on empowering teen girls to pursue their dreams of success through mentorship programs.We supported Step Ups Black Girls Town Hall and Latine Town Hall,each of which was a facilitated conversation designed to create safe and brave spaces for teens to connect,share and learn from thought leaders of color on“Freeing the Magic”and“Leaders without Limits.”Ulta Beauty provided financial support,product donations and associates who volunteered as speakers and mentors to small groups of attendees at these inaugural events.o Communities In Schools(CIS),a group that addresses inequities in education by providing social-emotional support,school supplies,enrichment opportunities,access to health services and mentoring.Jodi Caro,General Counsel,Chief Risk&Compliance Officer(who served on the CIS board for 11 years and now serves on the organizations Leadership Council);and Rob Sorum,Regional Vice President,participated in a virtual discussion with CIS Senior Director Elizabeth Mejia to learn more about CISs efforts and actions associates can take to support students.o Skills for Chicagolands Future,which helps unemployed job-seekers re-enter the workforce.Ulta Beauty hired 39 candidates through the program in 2021,and 192 hires since Jeff Childs,Ulta Beauty CHRO,joined the board in 2015.One of Ulta Beautys longtime local partners is Big Brothers Big Sisters of Metropolitan Chicago(BBBSChi).Our CEO,Dave Kimbell,a former“Big”himself,now serves on the organizations board.Across the company,many associates volunteer as mentors,including Jackie Dinvaut,Senior Manager of Store Development.Five years ago,Dinvaut and her husband signed up to be mentors,and were matched with a pair of brothers.“When we read Immanuel and Barrons bios,we felt a connection,”Dinvaut says.“We have become a part of each others families.We have celebrated wins on the baseball field,bought school supplies,dried tears when they lost their older sister,celebrated progress made in the classroom,helped with homework,helped with interview prep for their first job;the list goes on.”Dinvaut recently participated in a BBBSChi virtual happy hour,sponsored by Ulta Beauty,where she shared her story and encouraged people from diverse backgrounds to become Bigs.“If you are considering becoming a Big,be prepared to give your whole self to your Little,”Dinvaut says.“But once they feel safe to give you the love and trust back,the rewards are endless.”Setting an example through The Representation Happy Hour is an ongoing series of events hosted by Big Brothers Big Sisters of Metropolitan Chicago(BBBSMC)to promote diversity amongst their Bigs.This important initiative is to help increase representation in their mentoring programs.Ulta Beauty recently sponsored the January Happy Hour by providing speakers and gift cards to encourage individuals to apply to become a Big.We also invited associates to join the Fun and we had 14 attendees from across the business participate in this virtual event!BBBS said this was the best event in their representation series theyd had so far!Attendees networked with current Bigs of color and heard from Dave Kimbell,a former Big and current BBBS Board member,and Jackie Dinvaut,Ulta Beauty associate and current Big Sister.During the Happy Hour BBBS showed a video,“Kids Explain Black History Month”.Be sure to watch it!If you missed this program and are still interested in becoming a Big or learning more,you can attend an upcoming virtual New Volunteer Orientation.Click here for more information!Jackie Dinvaut,current Big Sister&Ulta Beauty Sr.Manager Store DevelopmentJackie&her husband are mentors to two brothers.During the event,Jackie shared that the brothers and their families have become an extension of one anothers.Not only do they provide advice and a steady force in the lives of the boys but also for their mom which has had a huge impact.When the boys are going through hard times,its meant a lot to them to have two people in their lives that have remained consistent when they havent always had consistency.Thats what makes this relationship so special!Big Brothers Big Sisters 2021 ESG Report37EnvironmentCommunityProductPeopleIntroductionSupplemental Dataleaving apositivelegacy for our worldGiving the gift of beauty Product donations in communities Our efforts to donate product to our community partners continued in 2021.For example,to date,we have donated more than 65 pallets of product to GLAM4GOOD and Project Glimmer to bring beauty essentials and smiles to women and girls across the country.As a token of appreciation for the healthcare community,our Fresno Distribution Center packed and distributed 10,000 goodie bags for workers at the Community Health System in California.A goal for next year is to bring more transparency to our in-kind giving and its impact on communities.Beyond ongoing partnerships with community organizations,Ulta Beauty associates may also support causes they care about by requesting a charity basket.Charity baskets contain an assortment of Ulta Beauty products and may be donated to nonprofit fundraisers or charity auctionsextending our reach and allowing us to give back in a uniquely Ulta Beauty way.Encouraging civic engagementThe right to vote is fundamental to advancing a more equitable society.Our partnership with business coalition Time to Vote demonstrates our commitment to this basic right.Ulta Beauty encourages associates to vote by providing time off to cast votes and providing non-partisan resources on voter registration,candidate information and how to vote.We communicate with associates about the importance of civic involvement at key moments in time like National Voter Registration Day.1 1 Our Code of Conduct respects the right of associates to engage in political activity,however we prohibit the use of corporate funds for political contributions.You might not think that a little orange bag full of product is meaningful,but it is.Its recognition.”Carla Milton SVP,Chief Human Resources Officer at Community Health System,an organization that received product donations from Ulta Beauty2021 ESG Report38EnvironmentCommunityProductPeopleIntroductionSupplemental Dataleaving apositivelegacy for our worldSupplemental Data2021 ESG Report39Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldACCOUNTING METRICSTOPICACCOUNTING METRICCATEGORYUNIT OF MEASURECODERESPONSE/COMMENTENERGY MANAGEMENTIN RETAIL&DISTRIBUTION(1)Total energy consumed,(2)percentage grid electricity,(3)percentage renewableQuantitativeGigajoules(GJ),Percentage(%)CG-MR-130a.1(1)Environment Energy&Emissions Energy Consumption FY17-21(2)84%(3)16TA SECURITYDescription of approach to identifying and addressing data security risksDiscussion and analysisn/aCG-MR-230a.1Introduction Corporate Governance Board Oversight;Data Stewardship(1)Number of data breaches,(2)percentage involving personally identifiable information(PII),(3)number of customers affectedQuantitativeNumber,Percentage(%)CG-MR-230a.2Ulta Beauty experienced no data breaches in the past year and has not had a data breach since the companys founding in 1990.Sustainability Accounting Standards Board(SASB)Index 2021 ESG Report40Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldSustainability Accounting Standards Board(SASB)Index ACCOUNTING METRICSTOPICACCOUNTING METRICCATEGORYUNIT OF MEASURECODERESPONSE/COMMENTLABOR PRACTICES(1)Average hourly wage and (2)percentage of in-store employees earning minimum wage,by regionQuantitativeReporting currency,Percentage(%)CG-MR-310a.1(1)The median hourly wage of in-store,full-time regular employees(excluding seasonal,temporary and commissioned employees as determined by employment class)as of January 29,2022,was$19.86.(2)Percentage of in-store employees earning minimum wage,by region RegionTotal AssociatesAssociates Above Minimum WageTotalove Minimum Wage within RegionTotal%at Minimum Wage within RegionSales OpsSouthwest4,9054,78798%2%Sales OpsMidAtlantic4,8434,33590%Sales Ops Pacific Northwest3,8163,57594%6%Sales OpsNortheast4,0083,27582%Sales OpsCentral West2,8852,70794%6%Sales OpsCentral East4,1703,60086%Sales OpsCalifornia4,9344,88099%1%Sales OpsSouth4,6704,12888%Sales OpsMid East3,6533,62099%1%Grand Total37,88434,90792%8%(1)Voluntary and(2)involuntary turnover rate for in-store employeesQuantitativeRateCG-MR-310a.2Full-time regular employees(excluding seasonal,temporary and commissioned employees as determined by employment class)as of January 29,2022Annualized TurnoverAll Types:44.1%Annualized TurnoverVoluntary:39.0%Total amount of monetary losses as a result of legal proceedings associated with labor law violationsQuantitativeReporting currencyCG-MR-310a.3No material monetary losses have resulted from legal proceedings associated with labor law violations in 2021.2021 ESG Report41Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldACCOUNTING METRICSTOPICACCOUNTING METRICCATEGORYUNIT OF MEASURECODERESPONSE/COMMENTWORKFORCE DIVERSITY&INCLUSIONPercentage of gender and racial/ethnic group representation for(1)management and (2)all other employeesQuantitativePercentage(%)CG-MR-330a.1(1)Management Director-Level Associates:75%white 25%racially diverse67%women 33%menExecutive Team:67%women 33%menUlta Beauty Leadership(director-level associates and above):65%women 25%racially diverse(2)All other employees Ulta Associates(below director level):91%women 9%men 49%racially diverseSee Supplemental Data Appendix for EEO-1 information for regular managerial and non-managerial employees in operationsTotal amount of monetary losses as a result of legal proceedings associated with employment discriminationQuantitativeReporting currencyCG-MR-330a.2No material monetary losses have resulted from legal proceedings associated with employment discrimination in 2021.Sustainability Accounting Standards Board(SASB)Index 2021 ESG Report42Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldSustainability Accounting Standards Board(SASB)Index ACCOUNTING METRICSTOPICACCOUNTING METRICCATEGORYUNIT OF MEASURECODERESPONSE/COMMENTPRODUCT SOURCING,PACKAGING&MARKETINGRevenue from products third-party certified to environmental and/or social sustainability standardsQuantitativeReporting currencyCG-MR-410a.1Data unavailable for 2021.We are evaluating potential disclosure on this topic in the future.Discussion of processes to assess and manage risks and/or hazards associated with chemicals in productsDiscussion and analysisn/aCG-MR-410a.2We train associates who handle hazardous materials so they can do so safely and in compliance with applicable laws,rules and regulations.Additionally,we maintain safe indoor air for all customers even while hairsprays,dyes and other products are in use in our salons.Learn more about the Clean Ingredients pillar of our Conscious Beauty at Ulta Beauty program in the Product section of this report.Discussion of strategies to reduce the environmental impact of packagingDiscussion and analysisn/aCG-MR-410a.3We have set a sustainable packaging target that by 2025,50%of packaging sold at Ulta Beauty will be recyclable,refillable or made from recycled or bio-sourced materials.Learn more about the Sustainable Packaging pillar of our Conscious Beauty at Ulta Beauty program in the Product section of this report.ACTIVITY METRICACCOUNTING METRICCATEGORYUNIT OF MEASURECODERESPONSE/COMMENTNumber of:(1)retail locations and (2)distribution centersQuantitativeNumberCG-MR-000.A(1)1,300 stores(2)6 distribution and fast fulfillment centersTotal area of:(1)retail space and (2)distribution centersQuantitativeSquare feetCG-MR-000.B(1)14M total store square feet(2)3M square feet in distribution centers2021 ESG Report43Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldTask Force on Climate-Related Financial Disclosures(TCFD)DISCLOSURE FOCUS AREARECOMMENDED DISCLOSURERESPONSE/REFERENCEGovernanceDisclose the organizations governance around climate-related risks and opportunities.a)Describe the boards oversight of climate-related risks and opportunities.Introduction Corporate Governance Board OversightSupplemental Data ESG Program Structure2021 Proxy Statement Corporate Governance Board Role in Risk Oversight,pgs.4-5b)Describe managements role in assessing and managing climate-related risks and opportunities.Our General Counsel,Chief Risk&Compliance Officer,who reports to the Chief Executive Officer,is the executive sponsor of our ESG program and works with a cross-functional team of experts,including representatives from Growth and Development/Energy Management,Supply Chain and Procurement,Finance,Corporate Strategy,and Legal,Risk&Governance.Supplemental Data ESG Program StructureStrategyDisclose the actual and potential impacts of climate-related risks and opportunities on the organizations businesses,strategy and financial planning.a)Describe the climate-related risks and opportunities the organization has identified over the short,medium,and long term.b)Describe the impact of climate-related risks and opportunities on the organizations businesses,strategy,and financial planning.Ulta Beauty is committed to reducing our energy use and GHG emissions,as evidenced by a$2M investment retrofitting our energy management system and a$5.5M investment in lighting upgrades across 100 stores.Additionally,we purchase renewable energy credits,which in 2021 offset 16%of the companys FY21 electricity usage.As Scope 3 emissions represent 95%of our footprint,we are exploring ways to reduce these upstream and downstream emissions,such as consolidating shipments,using EPA SmartWay-certified carriers and preparing to conduct due diligence with brand partners and other vendors to better understand their emissions.From a product perspective,aspects of our Conscious Beauty at Ulta Beauty initiative contribute to a reduction of the use of natural resources and associated carbon emissions.Learn More:Product Conscious Beauty at Ulta Beauty Environment Energy&Emissions;Water&Waste Sending Less to Landfillc)Describe the potential impact of different scenarios,including a 2C scenario,on the organizations businesses,strategy,and financial planning.Ulta Beauty has not yet undertaken climate-related scenario analysis,but we anticipate conducting qualitative and/or quantitative analysis in the next two years.2021 ESG Report44Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldTask Force on Climate-Related Financial Disclosures(TCFD)DISCLOSURE FOCUS AREARECOMMENDED DISCLOSURERESPONSE/REFERENCERisk ManagementDisclose how the organization identifies,assesses and manages climate-related risks.a)Describe the organizations processes for identifying and assessing climate-related risks.b)Describe the organizations processes for managing climate-related risks.c)Describe how processes for identifying,assessing,and managing climate-related risks are integrated into the organizations overall risk management.Introduction Corporate Governance Board Oversight,Risk Management2021 Proxy Statement Corporate Governance Board Role in Risk Oversight,pgs.4-5Metrics and TargetsDisclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities.a)Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.Comparable store annual energy consumption Annual energy savings from investments and upgrades Grid vs.renewable energy consumption Scope 1,2 and 3 emissions Percentage of packaging sold that is recyclable,refillable or made from recycled or bio-based sourcesb)Disclose Scope 1,Scope 2,and,if appropriate,Scope 3 greenhouse gas(GHG)emissions,and the related risks.Environment Energy&Emissionsc)Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.Ulta Beauty has a formal commitment to set emissions reduction targets in accordance with the terms of the Science Based Targets initiative covering Scope 1,2 and 3 emissions.2021 ESG Report45Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldAppendixGENDERCOUNTPERCENTAGEFemale33,97394.1%Male2,1205.9%Unknown10.0%Grand Total36,094100.0%ETHNICITYFEMALEMALEUNKNOWNGRAND TOTALCountPercentageCountPercentageCountPercentageCountPercentageAmerican Indian/Alaskan Native500.80.6S0.8%Asian1201.93.362.0%Black or African American4928.0D9.1S68.1%Hispanic or Latino1,42023.0828.6%1,55823.4%Native Hawaiian or Other Pacific Island200.3 .40.3%Two or More Races2123.43.593.4%White3,79161.4%853.5.0%4,05060.9%Unknown510.8.8U0.8%I do not wish to provide160.3.00.2%Grand Total6,17292.7H27.2.0%6,655100.0%THE PERCENTAGE OF EACH GENDER CATEGORY FOR U.S.OPERATIONSU.S.Operations,Regular Employees by Gender (less seasonal and temporary employees)as of January 29,2022STANDARD EEO-1 RACIAL AND ETHNIC GROUP CATEGORIES FOR U.S.OPERATIONS FOR MANAGEMENTU.S.Operations,Regular Managerial Employees by Ethnicity&Gender (less seasonal and temporary employees)as of January 29,20222021 ESG Report46Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldETHNICITYFEMALEMALETOTALCountPercentageCountPercentageCountPercentageAmerican Indian/Alaskan Native242 0.9 0.1&2 0.9%Asian9353.4U 0.20 3.4%Black or African American3,06511.030.6%3,21810.9%Hispanic or Latino7,98328.7T0 1.9%8,52329.0%Native Hawaiian or Other Pacific Island1050.4 0.110.4%Two or More Races1,2394.50.3%1,3194.5%White13,86149.9t8 2.7,60949.6%Unknown3161.1%0.1411.2%I do not wish to provide55 0.2%1 0.0V0.2%Grand Total27,80194.4%1,6385.6),439100.0%STANDARD EEO-1 RACIAL AND ETHNIC GROUP CATEGORIES FOR U.S.OPERATIONS FOR NON-MANAGEMENTU.S.Operations,Regular Non-Managerial Employees by Ethnicity&Gender(less seasonal and temporary employees)as of January 29,2022Appendix2021 ESG Report47Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldUlta Beauty ESG Fact Sheet REPORT SECTION2021Ulta Beauty At-A-GlanceOUR FOOTPRINT(AS OF 1/29/2022)Stores1,300 Distribution centers6States50Associates40,000 ULTA BEAUTY COMMITMENTS AT-A-GLANCESustainable Packaging Commitment:Percentage of packaging sold at Ulta Beauty that will be recyclable,refillable or made from recycled or bio-sourced materials by 202550%Emissions Reduction Commitment:Committed to set science-based emissions reduction targets with the Science Based Targets initiative2x renewable energy credits in 2022Championing Diversity Dollars allocated to media investments across endemic and multicultural platforms to create more personal connections with Latine,Black and other communities$20 million Additional Black-owned brands in our assortment by the end of 20212x Percentage of shelf space devoted to Black-owned businesses,through the Fifteen Percent Pledge15%Dollars dedicated to marketing support of Black-owned brands$4 million Dollars invested in quarterly in-store training for all store and salon associates to reinforce inclusivity and address unconscious bias$2 million Percentage of field,distribution center and corporate associates required to participate in Stronger Together Leadership Training 100%CORPORATE GOVERNANCE:BOARD DIVERSITY(AS OF 2/16/2022)Women54%Men46%Identify as racially diverse31%Identify as LGBTQ 8%of directors joined the Board within the past five years46 21 ESG Report48Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldUlta Beauty ESG Fact Sheet REPORT SECTION2021People%of diverse hires at the director level and above50%Women elevated to management roles in the past five years6,200 DIVERSITY&INCLUSIONUlta Beauty AssociatesWomen90%Men10%Executive TeamWomen67%Men33%Ulta Beauty Leadership(director level and above)Women65%People of color25 22 Diversity,Equity and Inclusion Commitments(as of February 3,2022)Commitment to Amplifying Underrepresented Voices Dedicate approximately$25 million in media investments with multicultural platforms to nurture personal connections with Latine,Black and other multicultural beauty enthusiasts.10%of this investment will be directly spent with Black-and Latine-owned media outlets,outpacing media industry benchmarks.Build upon our newly established and widely proclaimed MUSE platform with programming to magnify,uplift,support and empower Black voices in beauty.Invest$8.5 million to brand marketing support for Black-owned,Black-founded and Black-led brands within the companys assortment,more than doubling last years investment to reflect Ulta Beautys expanded Black-owned assortment.Commitment to Curating&Nurturing a Diverse Assortment Launch a Brand Partner Accelerator Program focused on early-stage BIPOC beauty brands.Ulta Beauty will provide time,resources and mentorship to educate,inspire and support accelerator participants with brand development for retail readiness.Invest$5 million in New Voices,a venture capital firm that partners with and invests in entrepreneurs of color to drive scalable,sustainable businesses and create generational wealth.As the VCs beauty retail partner,Ulta Beauty will provide priority access to shelf space,merchandising and marketing support.Allocate$3.5 million to in-store merchandising support so guests can more readily find the Black-owned,Black-founded and Black-led brands within the Ulta Beauty assortment.2021 ESG Report49Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldUlta Beauty ESG Fact Sheet REPORT SECTION2021Commitment to Guest Experiences The Ulta Beauty Charitable Foundation will donate$2 million to BIPOC and LGBTQ -focused nonprofits with volunteering and education opportunities for associates.Inclusion in Action,the quarterly,in-store training launched in 2021 to reinforce inclusivity and address unconscious bias,will now be mandatory for distribution center and corporate associates in addition to a second year of curriculum for salon and store associates.This accounts for a$2.5 million investment in addition to the existing company trainings and will result in a minimum 3.5 hours of required DEI training for all associates.Textured hair and shade-matching education trainings will be further enriched across every Ulta Beauty salon.Commitment to Associate Experiences The reimagined Diverse Leaders Development Program has doubled the number of associates and will include expanded external partner expertise,dedicated trainings as well as CEO and executive mentorship for high-potential,future company leaders.Ulta Beauty will continue to significantly invest in incremental efforts to support the companys diverse slate recruitment efforts.Teams across the company will continue to acknowledge and celebrate lived experiences with always-on DEI internal programming with dedicated workshops,panels,keynote speakers and educational programming for key moments such as Diversity Week,Pride Month,Black History Month and Asian Pacific American Heritage Month,among others.ProductsProducts25,000 Brands600 Certified to one or more of the Conscious Beauty at Ulta Beauty pillars270Ulta Beautys Sustainable Packaging Goal:%of packaging sold at Ulta Beauty will be recyclable,refillable or made from recycled or bio-sourced materials by 202550%CommunityDollars raised for Save the Children$2.4 millionDollars raised for Breast Cancer Research Foundation(cumulative since 2009)$42 million 2021 ESG Report50Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldUlta Beauty ESG Fact Sheet REPORT SECTION2021Dollars raised for Dress for Success(cumulative since 2017)$1 millionEnvironmentEMISSIONS SCOPE:PORTION OF OUR FOOTPRINTScopes 1&25%Scope 395%WASTEPercentage of our waste diverted for recycling48%Tons of waste diverted from landfill(thousands)14.8FrameworksFrameworks to which Ulta Beauty reportsSASB and TCFD2021 ESG Report51Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldNewsweek Americas Most Trusted Brands for 2022Winner of“Most Trusted Cosmetics Brand”2021 Beacon Awards Winner of“Best Large Retailers”in the“Game-Changing Retailers”category2021 Forbes The Best Employers for Women#15National Retail Federation Top 100 Retailers 2021 List#642021 DiversityInc Noteworthy Companies for Diversity2021 CIO 100 Awards Ulta Beauty IT Team2021 Most Improved RetailerMind the Store2021 Bloomberg Gender-Equality IndexFast Company Most Innovative Retail Companies of 2021#62021 Forbes The Best Employers for Diversity#1082021 Ulta Beauty Awards&Recognition 2021 ESG Report52Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our worldESG program structure2021 ESG Report53Supplemental DataCommunityEnvironmentProductPeopleIntroductionleaving apositivelegacy for our world oInformation Security Management Policy oInsider Trading Policy oIT Risk Management Policy oNetwork Security Policy oOfficial Government Inspections Policy and Procedure oOpen Door Policy oPrivacy Policy oRecords and Information Management Policy oUlta Beauty Gift&Gratis Policy oVendor Risk Management Policy oAcceptable Use Policy oAmericans with Disabilities Act Policy o Harassment and Discrimination Prevention Policy oConfidentiality Policy oEmployment-At-Will Policy oEthics and Business in Business Transactions Policy oIdentity and Access Management Policy o Relationships in the Workplace PolicyUlta Beauty ethics&compliance policiesBelow is a list of our Ethics&Compliance and IT policies.You can find an overview of our Ethics&Compliance Policies in our Code of Business Conduct.2021 ESG Report54Supplemental DataCommunityEnvironmentProductPeopleIntroductionThank you for your interest in Ulta Beauty.If you have any questions about this report,please contact our General Counsel,Chief Risk&Compliance Officer,Jodi Caro,at InvestorR
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