Climate & Energy

Scope 1 & 2 greenhouse gas (“GHG”) emissions include stationary combustion, mobile combustion, fugitive emissions, and purchased electricity. We use strategies such as installing LED lighting and submeter systems to increase operational efficiency in our Global Home Office, data centers, and stores to reduce scope 1 & 2 emissions.

As of January 2023, we are being supplied with energy under our long-term renewable energy supply agreement, and 100% of electricity used at our global home office and our two distribution centers in New Albany, Ohio will be matched with renewable energy credits sourced through the agreement.

To further address our GHG emissions, A&F Co. continues to thoughtfully open new stores and invest in smaller omni-enabled store experiences that align with local customer shopping preferences. New store formats are designed to provide the opportunity for higher productivity through a smaller footprint. A&F Co. continues to evaluate and manage its store fleet through its ongoing global store network optimization initiative and has taken actions to optimize store productivity by remodeling, rightsizing or relocating stores to smaller square footage locations, and closing legacy stores. 

In 2022, A&F Co. completed an energy efficiency HVAC initiative, which involved HVAC audits and setpoint adjustments for the global retail fleet to reduce CO2e. The initiative focused on a remote equipment audit, setpoint review, site engagement, an HVAC schedule update and identifying additional energy initiatives at the sites. The HVAC audit focused on reviewing fan settings, discharge air, compressor status and other factors to determine if units were running 100% efficiently. Any deficiencies were noted and sent to maintenance vendors. All existing setpoints were documented and reviewed to determine how many set points were outside the corporate standard. Stores were reset back to the corporate standard, and a new schedule update was activated for unoccupied time energy efficiency. 

Scope 3 GHG emissions include indirect emissions that occur in A&F Co.’s value chain, including product transportation, business travel and supplier emissions. With help from partners like the British Standards Institution (BSI) and the Environmental Defense Fund Climate Corp, we continue to track our scope 3 GHG emissions in accordance with the Science Based Targets (“SBT”) guidelines. Purchased goods and services are the greatest contributor to A&F Co.’s GHG footprint, accounting for 70% of our total emissions. A&F Co.’s sustainability team is working with its sourcing team to identify reduction opportunities, such as increasing our use of recycled materials and more sustainable viscose.

A&F Co. continues to focus on route and mode optimization in global product transportation. The introduction of sea-air/multi-mode programs for inbound shipments reduces carbon emissions through more frequent use of the less carbon intensive ocean mode, and A&F Co. works with transportation providers that offer less carbon intensive fuel options in international shipping lanes. A&F Co. is steadily increasing its inland intermodal footprint. Using the intermodal mode reduces carbon emissions when compared to over-the-road linehaul product movement.

A&F Co. utilizes the US EPA Environmentally-Extended Input-Output (EEIO) Supply Chain GHG Emission Factors to calculate carbon emissions from indirect procurement in Category 1 Purchased Goods and Services, Category 2 Capital Goods, and operational waste in Category 5 Waste Generated in Operations. From 2019 to 2022, A&F Co. used version 1.1.16*, but in 2023, A&F Co. updated calculation processes to use version 1.2**. Notably, the emission factor for Category 5 Waste Generated in Operations decreased by 49% compared to the factor used from 2019 to 2022. Additionally, A&F Co. factored in the inflation rate from the International Monetary Fund (IMF) by adjusting the EEIO emission factor accordingly.

Partnerships

It is important for industry to take collective action to reduce carbon emission across the supply chain. A&F Co. continuously partners with different organizations to accelerate the implementation of carbon reduction in our suppliers.  

A&F Co. partnered with an Environmental Defense Fund Climate Corp Fellow in 2019 to identify our product shipment emissions in the supply chain. Efforts continued in 2020 as A&F Co. acknowledged the strategic importance and growing significance of transportation and distribution generated emissions from third parties. In 2020, the company began implementing measures to capture emissions data for domestic freight and intermodal transportation to add into its inventory.

In 2021, we partnered with The British Standards Institution (BSI) to identify all applicable categories scope 3 emissions in according to the Science Based Targets (SBT) guideline.

Since 2021, A&F Co. has partnered with Apparel Impact Institute (Aii) to nominate our Tier 1 and 2 suppliers in the Carbon Leadership Program (“CLP”) which is a carbon management program to assess suppliers carbon reduction opportunities and define an action plan against their carbon reduction target. We aim to have our top 60 vendors participate in the CLP by 2024.

In 2022, we nominated two Cambodia factories to participate in the “Low Carbon Development for Productivity and Climate Change Mitigation through the Transfer of Environmentally Sound Technology (TEST) Methodology project. This is a collaboration of the Ministry of Industry, Science, Technology and Innovation (MISIT) in Cambodia and United Nations Industrial Development Organization *UNIDO) aimed at promoting clean production and improving environmental efficiency in suppliers.

As a member of Cascale (formerly named Sustainable Apparel Coalition (SAC)), A&F Co. participates in their Decarbonization Progam. In 2023, Cascale collaborated with German Agency for International Cooperation (GIZ) Project Development Program (PDP), to accelerate decarbonization in the supply chain through conducting pre-feasibility studies of rooftop solar opportunities. A&F Co. nominated Tier 1 factories in Cambodia and Vietnam participating in the PDP to promote the adoption of renewable energy. 

Purchased goods and services are the greatest contributor to A&F Co.’s GHG footprint, accounting for 70% of our total emissions. A&F Co.’s sustainability team is working with its sourcing team to identify reduction opportunities, such as increasing our use of recycled materials and more sustainable viscose, as well as enrolling our strategic Tier 1 and 2 suppliers in the Carbon Leadership Program (“CLP”) by the Apparel Impact Institute (“Aii”) to set a reduction plan and target.

A&F Co. will continue our work to establish a reduction target and identify more carbon reduction opportunities