Sustainability isn’t just good for the environment – it’s good for business
As countries, corporations and consumers band together to address increasingly severe climate change, several retailers, including Gap, are leading the charge in supply chain sustainability.
Gap, the namesake brand of ~$16B clothing retailer Gap Inc., has many reasons to care about its contributions to climate change. First among these is economics. Carbon emissions – a leading contributor to climate change – are lower in more efficient supply chains, and more efficient supply chains are less costly to operate. As retailers work to make their supply chains “greener”, they will decrease the costs of producing goods and getting goods to the consumer.  Gap has a somewhat unique environmental challenge: it focuses on selling cotton apparel staples, like t-shirts and jeans, that have a particularly high environmental impact compared to many other apparel items.  As it reduces the environmental impact of its sourcing and manufacturing, it will save money on natural resources used for production.
Sustainable retailing also has revenue benefits, as corporate social responsibility is gaining importance in the mind of the consumer. In a survey of apparel shoppers, Morgan Stanley found that “good ethics” jumped from 53% importance to shoppers in 2010, to 62% in 2016.  By implementing and then marketing its sustainability efforts, Gap has the opportunity to retain or win share of wallet among environmentally conscious consumers.
Finally, there is regulatory uncertainty surrounding environmental allowances and restrictions. Retailers that get ahead of today’s standards reduce their exposure to financial risk from complying with future regulations.
Gap continues to make efforts to reduce the direct environmental impacts of its supply chain
Gap’s past environmental efforts give it a solid foundation on which to keep building. The retailer has stated standards for its mills regarding environmental impact. It has a clear map of its full supply chain (not all retailers do), dutifully tracks which suppliers are being used, and knows which suppliers give visibility and control to Gap. It requires its cut and sew facilities to self-report data for identifying sustainability opportunities. 
Going forward, Gap is focusing sustainability efforts on product design, sourcing and production. In the near-term, this centers on reducing water usage during production of textiles and finished goods. To that end, this year Gap launched “Gap for Good” denim, made with 20% less water and available in all Gap stores.  Outside of water consumption, the majority of Gap’s environmental efforts will be realized in the medium-term. Gap has set several environmental goals for the next 5-10 years :
- Sourcing 100% of cotton from “more sustainable sources” by 2021
- Reducing greenhouse gas emissions by 50% by 2020
- Diverting 80% of landfill waste by 2020
- Producing 80% of materials for Athleta (a Gap “sister brand”) with sustainable fibers, an innovation that will benefit other Gap Inc. brands
Gap also announced in September 2017 its membership in the Science Based Targets Initiative, signaling a commitment to set science-based emissions reductions targets within two years. 
In the long-term, Gap has stated an intent to explore “sustainable chemistry” and low-impact solutions for clothing at end of life. However, little progress appears to have been made on these topics.
To reach full potential, Gap should focus on downstream logistics and consumer behavior
While its sustainability efforts thus far, focused on direct emissions, are important, Gap has the opportunity for even greater environmental “savings” by considering the indirect impact it has on the climate. Though hardest to measure and control, these indirect impacts – like emissions from a truck delivering a Gap order to a consumer – are “by far the largest component of most organizations’ carbon footprints.” 
Today, shoppers’ expectations for speed and convenience are higher than ever before. Retailers are responding by offering the consumer what he wants, when and how he wants it (and often at no additional charge). This has huge implications for indirect emissions, and Gap should set its sights on limiting these emissions in order to reduce total climate impact.
Gap can further educate the consumer about sustainable retailing. It can encourage lower impact shopping behavior – like making consolidated purchases instead of one-off ecommerce buys or one-off trips to the store.  It can teach customers to demand the green retailing Gap is working so hard to deliver. Or perhaps Gap can find more efficient ways to move its products, like partnering with logistics providers leading the charge on sustainability, or using digitalization to shorten the supply chain (e.g., 3D printing components on-site instead of shipping them).
But many questions remain… How best can Gap partner with logistics providers to deliver the experience consumers expect with lower environmental impact? What are the most effective ways for Gap to align its incentives with those of partners and consumers to mitigate climate change?
 Cheris, A. et al. (2017). Retailers’ Challenge: How to Cut Carbon Emissions as E-Commerce Soars. Available at: http://www.bain.com/publications/articles/how-to-cut-carbon-emissions-as-ecommerce-soars.aspx [Accessed 15 Nov. 2017].
 World Wildlife Foundation. (2017). Cotton: a water wasting crop. Available at: http://wwf.panda.org/about_our_earth/about_freshwater/freshwater_problems/thirsty_crops/cotton/ [Accessed 15 Nov. 2017].
 Morgan Stanley. (2017). Is Ethical Retailing Real?. Available at: https://www.morganstanley.com/ideas/ethical-retailing-consumers-survey [Accessed 15 Nov. 2017].
 Gap Inc. Sustainability. (2017). Mapping the Product Life Cycle. Available at: http://www.gapincsustainability.com/product/mapping-product-life-cycle [Accessed 15 Nov. 2017].
 Peck, A. (2017). CEO Letter | Gap Sustainability. Available at: http://www.gapincsustainability.com/strategy/ceo-letter [Accessed 15 Nov. 2017].
 Gap Inc. Sustainability. (2017). Product Sustainability | Gap Sustainability. Available at: http://www.gapincsustainability.com/product/product-sustainability [Accessed 15 Nov. 2017].
 World Wildlife Foundation. (2017). Gap Inc., NIKE, Inc., Levi’s Among Retailers Joining Initiative to Tackle Climate Change. Available at: http://wwf.panda.org/what_we_do/footprint/climate_carbon_energy/?311650/wwf-sbt-companies [Accessed 15 Nov. 2017].
 Greenhouse Gas Protocol. (2017). Scope 3 Calculation Guidanc. Available at: http://www.ghgprotocol.org/scope-3-technical-calculation-guidance [Accessed 15 Nov. 2017].