Our View: Gildan has reflected ESG related principles into its strategy and operations for many years (i.e., the Gildan Biotop biological wastewater treatment system, its employee wellness initiatives, etc.), and today’s announcement builds on Gildan’s learnings from the previous five-year ESG strategy (2015-2020). Today’s release also provides specific targets for many ESG goals that investors will be able to track over time, which we view as a positive.
Gildan reveals its Next Generation ESG strategy and future targets – The new strategy aims to address global environmental and social priorities that focus on enhancing the lives of its employees, further protecting the environment, “empowering neighboring communities”, and increasing the sustainability of its products. We highlight some of the key priorities and targets below.
Climate, Energy and Water:
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Reducing scope 1 and 2 CO2 emissions by 30% by 2030, which aligns with the Science Based Targets initiative; and,
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Undertaking additional investments in water efficiency, aiming for a 20% reduction in water withdrawal from nature by 2030.
Circular Economy:
• Supporting the circular economy through initiatives such as: 1) sourcing 100% sustainable cotton by 2025 and 30% recycled polyester or alternative fibers and/or yarns by 2027; and, 2) achieving zero manufacturing waste by 2027 and using 75% recycled/sustainable packaging and trim materials by 2027.
Human Capital Management:
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Driving health and safety performance to new standards, with a goal of attaining ISO 45001 certification at all of the company’s owned and operated facilities by 2028; and,
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Improving gender parity (newly established goal) and achieving this for roles at or above the director level by 2027 (the company has already achieved gender parity globally at or below the manager level).
Long-term Value Creation:
• Support the economic development of regions in which Gildan operates through incrementally increasing capital allocation to projects in these areas and gradually reaching 1% contribution of the company’s pre-tax earnings (in the form of donations) by 2026.
Transparency and Disclosure:
• Improving ESG disclosures across areas of focus and further aligning to the Task Force on Climate-related Financial Disclosures framework. In 2022, this involves the company’s plan to provide a stand-alone report that outlines climate-related governance, strategy, risk management and metrics, and targets.