About the RILA’s Retail Sustainability Management Leadership ModelThe Model is a tool for retail sustainability executives to identify the management practices that will drive improved corporate and environmental performance.

The Model is divided into seven sections, including:n Strategy & Commitmentn People & Toolsn Visibilityn Retail Operationsn Supply Chainn Productsn Sustainability / CSR Issues

It is intended to identify possible pathways to strong environmental sustainability programs in retail. The leading practices are currently only performed by a few companies at most; and not every company can/will achieve every leading practice.

Process to Develop the ModelThe foundation for this Model is based the Retail Industry Leaders Association’s (RILA) primary knowledge of the industry and sustainability programs, and confirmed through secondary research. It represents the collective knowledge of many industry experts through three review periods in 2015 and update reviews in 2016 and 2017 that solicited input from environmental nonprofits and experts, and numerous retailers.

How to Use the ModelThe Model is a tool that can be used for individual company and industrywide purposes.

Individual retailers can use the Model to:n Identify the maturity of their program and opportunities for improvementn Facilitate internal conversations about the sustainability program’s developmentn Access more funding for sustainability programsn Train employees with sustainability responsibilitiesn Obtain buy-in from leadership and other departmentsn Evaluate internal and external perception, and then evaluate gaps

Program dimensions that were determined to be critical for embedding sustainability into a company’s corporate culture have been noted. Retailers should focus efforts on driving improvements in these key dimensions.

Retailers can refer to the Sustainability Resource Library for specific tools, case studies, and further opportunities to help them progress the maturity of their programs.

Scope of the ModelThis Model specifically focuses on environmental impacts associated with a retailer’s operations; subsequent versions may build upon this first version to include aspects of social, community, and diversity impacts as well. It will be updated periodically

Other related Models include the RILA Retail Energy Management Leadership Model and the ELEVATE Responsible Sourcing Management Model.

RILA’S 2017 RETAIL SUSTAINABILITY MANAGEMENT LEADERSHIP MODEL

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Visit www.RILA.org/sustainability to learn more about RILA’s Retail Sustainability Initiative.

RILA Sustainability Program Sponsors

Dimensions Initiating Progressing Excelling Leading Transforming

STRATEGY & COMMITMENT

1 Reduction strategy and goals

• Ad hoc efforts, no formal sustainability program or program relies on volunteers only

• Definedsustainabilityteamwithresponsibilities on short and long-term sustainability strategy

• Sustainability strategy is primarily focused on operational priorities rather than sourcing or merchandising practices

• Definedsustainabilityteamalignswithvariouskeydepartmentsonsustainability strategy for the short-and long-term

• Sustainability strategy encompasses operations, merchandising, and sourcing practices

• Sustainability strategy aligns across departmentsandwithoverallcorporatestrategy

• Incorporates internationally recognized standards (e.g., UNGC, SA8000, etc.) into long-term organizational strategy

• Balanced scorecard (people, planet, and profit)systeminplaceforreviewingstrategies and projects

• Sustainability strategy and corporate strategy are fully aligned

• Sustainability strategy/results regularly reported to executives and the board

• CEO regularly incorporates sustainability strategy in meetings and communications(e.g.,employeetownhalls / investor calls, etc.)

2 Materiality / Risk Identification

• Ad hoc efforts to identify sustainability risksandopportunities

• Assessesrisksandopportunitiesthrough a formal materiality process includingstakeholderconsultation

• Assessesrisksandopportunitiesandconductsbi-annualreview

• Assessment incorporates a timeframe of 3-6 years

• Individual departments (e.g., sourcing, operations)reviewmaterialityassessment

• Usesthesameprocessestoreviewsustainabilityrisksandopportunitiesascorporaterisksandopportunities

• Assessment incorporates a timeframe of more than 6-10 years

• Integration of sustainability and corporaterisks

• Assessment incorporates a timeframe of more than 10 years

3 Goals • Annual goals based on cost saving only• Basic sustainability goals that are benchmarkedagainstpeers

• Short- and long-term sustainability goals, mostly focused on operations

• Effortsinplacetobenchmarksustainability goals against peers

• Identifiesabsolutereductiongoalsformostofthematerialriskcategories(i.e.,energyconsumption,water,waste/recycling,sourcing,consumereducation)

• Routine and comprehensive benchmarkingeffortsinplacetoprioritize focus areas

• Definescomprehensive,aggressive,andcross-functional goals addressing all materialriskcategories

• Goals address most aspects of sustainability

• Includes separate goals focused on supply chains, products, sourcing, and marketing

• Uses global and local context of environmental conditions and aligns withscience-basedtargetstosetappropriate goals

• Quantitativelylinksprofitgoalswithsustainability goals

COMPANY’S SUSTAINABILITY MANAGEMENT MATURITYNote:Thesedimensionsaresolelyintendedtobepossiblepathwaystosustainabilityoptimization;theleadingpracticeiscurrentlyonlyperformedbyafewcompaniesatmost;andnoteverycompanycan/willachieveeveryleadingpractice.

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Dimensions Initiating Progressing Excelling Leading Transforming

STRATEGY & COMMITMENT (continued)

4 Governance & Executive Engagement

• Ownershipandaccountabilityforsustainabilityisconfinedtoonefunction (e.g., Environmental Health and Safety)

• Dedicated sustainability executive to design, manage, and continuously improve sustainability program and initiatives

• Sustainability council comprises senior leadersfromkeyfunctionalrolesandmeets periodically

• Accountabilityisclearlydefinedforsustainability goals and initiatives

• Board and company leadership develop and/or endorse goals and initiatives to improve sustainability

• Sustainability council comprises executives,definespriorities,andperiodically reports to senior leaders

• Senior management’s sustainability rolesareclearlydefined

• Board oversees and endorses sustainability goals and initiatives

• Dedicated executive champion for sustainability appointed by board

• Executives from all of the relevant parts of the business are engaged (e.g., strategy,innovation,finance,HR,legal,marketing,sourcing)

• Boardandkeyexecutivesheldaccountable for sustainability performance

• DedicatedChiefSustainabilityOfficerreports directly to CEO

• CSO & CEO partner to demonstrate business relevance of program to investorsandotherstakeholders

5 Corporate Values

• Thecorporatevaluesand/ormissionimplicitly addresses sustainability, responsibility,stewardship,ethics,and/or community values

• Thecorporatevaluesand/ormissionexplicitly mention sustainability, responsibility,stewardship,ethics,and/or community values

• Thestoryofthecompany’shistoryrefersto principles of sustainability and/or stewardship;andthatstoryiswell-knownthroughouttheorganization

• Thecorporatevaluesand/ormissionmention sustainability, and that ethos is reinforced in all major internal corporate communications, meetings, and events

• Senior executives regularly refer to the corporate values and history in terms of a sustainability and responsibility ethos, and use that to set the tone for the corporate culture

6 Incentives • Sustainable business and leadership practices factor into annual evaluations andcompensationinadhocways

• Performance evaluation and compensation considers multiple “balanced” goals and performance metrics

• Include basic sustainability goals for select leaders as part of metrics

• Includes sustainability metrics in annualreviewsandperformanceratingsfor each business function

• Rewards(monetaryornon-monetary)biggest contributions to sustainability performance

• Reviewsmid-levelmanagementprocessesregularlyandlinksittosustainability performance

• Providessomeincentivestoinfluencepositive personal behaviors for all employees (e.g., hybrid car or mass transit subsidy)

• Linksexecutivecompensationtosustainability performance

• Investsinincentivestoinfluencepositive employee behaviors (e.g., charging stations for electric vehicles at storeorofficeparkinglots)

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Dimensions Initiating Progressing Excelling Leading Transforming

PEOPLE AND TOOLS

7 Stakeholder Engagement

• Identifieskeystakeholderstothebusiness

• Identifiessomestakeholderconcernsonaperiodicbasisbutnodefinedmethodof proactive engagement

• Assessesstakeholderconcernssystematically through materiality analysis

• Establishes and communicates methods ofstakeholderengagement

• Addressesstakeholdersconcernsthrough materiality analysis and identifiessomeKPIsfromtheprocess

• Buildsrelationshipswithkeystakeholders

• IdentifiescomprehensivelistofKPIsthroughstakeholderengagementprocess

• Establishes and communicates methods ofstakeholderengagementbytypeandstakeholdergroup,includingfrequencyofengagement

• Incorporatesfeedbackfromkeystakeholdersintosustainabilitystrategy

• Consistently monitors and reports publiclyonKPIsidentifiedthroughstakeholderengagement

8 Human Resources and Corporate Communications Engagement (for Employee Engagement)

• Educates through environmental awarenesssignageinstores

• WorkswithHRtodevelopstoresustainability team(s) or sustainability advocates to monitor on-site performanceandprovidefeedbacktocorporate sustainability team

• Workswithcorporatecommunicationsteam to solicit sustainability suggestions from corporate employees

• Hosts events for corporate employees to learn about sustainability in their retail roles and in their home (e.g., Earth Month events)

• Posts store sustainability performance (e.g.,energyconsumption,waste/recycling generation) for all store associates to compare their store to other similar stores

• With corporate communications team, develops and maintains online platformforemployeestoreviewstore and company sustainability performance and submit ideas to reduce environmental footprint

• With HR, provides collaborative forum for high-initiative employees to receive recognition for their sustainability effortswhilesharingbestpracticeswithcolleagues

• With HR, develops and administers employee orientation and ongoing training programs

• Embeds sustainability into existing HR and corporate communications’ roles

• Holds highly visible senior leadership meetingsonsustainabilitywherestore employees, sourcing, merchants, logistics, and other staff are recognized

• ThroughexistingHRandcorporatecommunications channels, regularly educates employees on company sustainability vision and business case to underscore relevance to employee dailywork

• Trains in-store employees to educate customers about company’s sustainability/eco-awarenessefforts

9 Funding Mechanisms

• Minimal funding dedicated for sustainability programs

• BasicmechanismstotrackROIofsustainability efforts

• Ad hoc funds for sustainability programs (e.g.,energyefficiency,recyclingprograms,marketing,etc.)

• Conducts some adjustment of ROI on internal projects to account for sustainability metrics

• Dedicated fund for sustainability programs(e.g.,energyefficiencyinitiatives, recycling programs, etc.)

• Keyretailfunctionsincludesustainability budgeting (e.g., distribution, sourcing, merchandising, store operations)

• Allcorporatefundingrequestsroutinelyinclude relevant sustainability metrics

• ROI of projects considers total cost of ownershipandreputationalvalue

• Corporatefundingrequestsalwaysinclude sustainability metrics relevant to the division or business unit

• Sustainability-related funding on an upwardtrajectoryovertime

10 Corporate Giving, Foundation, and Volunteerism

• Ad hoc giving and volunteering, mainly to local charities

• Identifiedheadofcorporategiving• Centralizedtrackingandreportingof

giving and volunteer efforts

• Coordinated product and/or food donations, and volunteering, perhaps withnationwidenonprofitpartner

• Customer-facing messaging about corporate philanthropic efforts

• Strategic and signature giving and volunteercampaignstargetingspecificconstituents in local communities

• Coordinated international, national, and local efforts

• Strategic programmatic partnerships withNGOsandotherstoaddressspecificneedsofsupplychainworkers

11 Business InnovationMechanisms

• Ad hoc channels in place to invest in sustainable innovation (e.g., 3D printing, RFID innovations, mobile, etc.)

• Innovation mechanisms in place - sustainability is a criteria but not weightedtoreceivefavorablescore

• Innovation mechanisms in place to invest in sustainable innovations

• Solicits ideas from employees, suppliers, andexternalstakeholders

• Dedicated team to create and invest in sustainable innovations

• Innovation fund and dedicated team in place to invest in retail innovation around sustainability

• ChiefInnovationOfficerincorporatessustainability and continuous improvement into goals 4

Dimensions Initiating Progressing Excelling Leading Transforming

VISIBILITY

12 Metrics & Measurement

• Adhocmetricsdefinedforsustainability • Limited set of sustainability metrics focused mainly on operations

• BasicExcelspreadsheetsusedtotrackmetrics

• Metrics informed by materiality assessment and aligned to global frameworks(e.g.,GRI,IIRC,SASB)

• Sustainabilitymetricstrackedforsomeregions of the global business

• Measurementtoolstrackmetrics

• Sustainability metrics focused on all material aspects, including innovation

• Sustainabilitymetricstrackedforallofthe most relevant regions of the global business

• Automatedmeasurementtools;ITsystemsinplacetoperiodicallytrackthe majority of sustainability metrics

• Comprehensivemetricsdefinedtocoverallaspectsofsustainability;linkingpeopleandplanetwithprofit

• Material metrics chosen from most globalframeworkswithrationaleformetric selection clearly communicated

• Metrics captured consistently across global organization

13 Storytelling through Reporting & Communicating

• Regularly published report contains cursory mention of sustainable business practices

• Some limited sustainability/CSR informationisavailableonwebsite(e.g.,adedicatedwebpage,orgroupedwithcorporatephilanthropy)

• Company either publishes a sustainability report on a regular basis, orprovidesdetailedwebpagescoveringall aspects of sustainability

• Sustainability report includes both quantitativemetricsandqualitativestories

• Sustainability information is readily accessible in multiple formats and sustainability goals publicly articulated andtracked

• Includes a balanced and honest discussionofchallengesaswellasprogress

• Disclosesclimatechange,water,orforest-riskimpactsaspartoftheCarbonDisclosure Project (CDP)

• Scores in top of peer groups in sustainability measures and indices (e.g.,DowJonesSustainabilityIndex,CDP)

• Uses 3rd-party standards (e.g, GRI)• Sustainability statements are

independently audited• Communicates sustainability programs

in multiple, accessible formats (e.g., websites,productmarketingandlabeling, advertising)

• Uses integrated reporting• Focused multi-channel sustainability campaignwithfeaturessuchasaninteractivesustainabilitywebsite

• Communicates sustainability as integratedwithbrandethos

14 Storytelling through Point-of-Purchase Consumer Education

• Fewproductsareexplicitlydesignedtoreduce negative environmental impacts

• Limited education for consumers to learn about sustainability dimensions of products

• Somespecificallydesignatedproductsofferedhavesustainabilitybenefits;adhoccommunicationonthebenefitsofthose products

• High percentage of products offered havespecificsustainabilitybenefits;regularcommunicationonthebenefitsof those products

• Provides some information or tips to consumers to use products/services in aresponsibleway(e.g.,“Pleaserecyclethis cup”, “Wash this garment in cold water”)

• Dedicated online storefronts encourage consumerstoselectproductswithsustainabilitybenefits

• Providesconsumerswithtoolsorincentives for sustainable behavior change even after the purchase (via website,productpackaging,etc.)

• Significantin-storesignageorsectionsdedicatedtoproductswithadvancedsustainabilitybenefits

• Engagesconsumersaboutproductswithsustainabilitybenefits(e.g.,catalogs,webfilters,icons,onlinecalculators,product stories)

• Activelyengageswithcustomerevenafterthepurchase(viawebsite,productpackaging,etc.)tomitigateanyenvironmental impact of products

• Mostown-brandproductshaveadvancedsustainabilitybenefits,andcommunicatebenefitsonpackaging

15 Storytelling through Marketing Campaigns

• Adhocsustainability-relatedmarketingcampaigns

• Regularsustainability-relatedmarketingprograms

• Tendtofocusonspecificthemesortimes (e.g., Earth Day)

• Ongoing efforts and funding related to marketingsustainableproductsandservices

• Dedicated sustainability-focused marketerwithinmarketingteam

• Marketingeffectivenessmetricsfocuson reputation/brand value

• Significantmarketingbudgetsforsustainability-relatedmarketing

• MarketingeffectivenessmetricsincludefinancialROI

16 Collaborative Involvement

• Ad hoc peer engagement on sustainability issues

• Actively shares sustainability informationwithpeers

• Member of one or more industry associations focused on sustainable supply chain issues

• Activelycollaborateswithpeerstomakepositiveimpactwithinindustry

• Premier member of one or more industry associations or multi-lateral groups focused on relevant sustainability issues

• PartnerswithNGOs,governments,academia, or other institutions to identify improvement opportunities

• Takesaleadershiproleindevelopingnewtoolsorcapabilitiesthatwillenable peers to improve sustainability impact or supply chain sustainability performance

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Dimensions Initiating Progressing Excelling Leading Transforming

RETAIL OPERATIONS

17 Stores / Corporate Offices (Green Building & Land Use)

• Construction, renovation, and leasing decisions adhere to local regulations, but little or no ‘green’ standards

• Environmental impact, energy use, and occupant health are considered in a minorway

• Incorporates some ‘green building’ opportunities into construction, renovation, or leasing projects

• Opportunitiesarelimitedtolower-costoptions(e.g.,efficienttoilets,faucets,lightbulbs,andceilingfans;recycled/reclaimedflooring;low-VOCpaint)

• Small percent of facilities have ENERGY STARorLEEDcertification

• Routinely incorporates sustainability metrics into construction, renovation, and leasing decisions

• Accounts for sustainability factors (e.g., recycling infrastructure, alternative transportation for customers, etc.) in store site selection

• Higher percent of facilities have ENERGYSTARorLEEDcertification

• Majority of store site incentivizes customers to practice sustainable behaviors(e.g.,premiumparkingspacesfor hybrid or electric vehicles)

• At least half of facilities have ENERGY STARorLEEDcertification

• Implements smart landscaping at some storeandwarehousesitestoimprovewaterefficiency

• Greenbuildingandcertification(LEED,BREEAM, Living Building Challenge, ENERGY STAR, etc.) is expected on all projects, except in extreme cases

• Routinely employs smart landscaping, solarpanels,windturbines,orother technologies in the design andconstructionofnewstoresandwarehouses

18 Warehouses/ DCs

• Storage facilities employ ad hoc eco-efficienttechnologiesorpractices

• Emissions are compliant but not fully inventoried

• Programs are in place to minimize wasteandimproveworkflow

• Upgrades moving technologies (forklifts,automatedbelts,etc.)withenergy-efficientpowersources

• Installslow-energylighting,HVAC,andrefrigerationequipment

• Redesignswarehousingfacilitiesinorder to optimize space and reduce energy consumption

• Continuously minimizes footprint and resource consumption to create best uses for storage space and replaces non-sustainable products

• Regularlyaddsnewtechnologytoreduceenergy consumption in moving and storing goodswithinwarehouses

• Incorporatesgreenstandardsforallnewwarehousingtominimizeenergyandsafetycosts

• Incorporates green standards for all newwarehousingorretrofitsexistingwarehousingtominimizeenergyandsafety costs

• Developspartnershipswithcustomers,upstream processes, and transportation vendorstomaximizeflowofgoodsthroughfacilitieswhileminimizingenergyandwaste

19 Data Center & Applications

• Application development has ad hoc awarenessofpotentialtechniquesforgreening

• Sizingandlayoutofownedorcontracted data center infrastructure isadhocandgearedtowardsmeetingcurrent needs

• ThereareadhocdecisionsaroundgreenIT considerations

• Reduces redundant functions in inventory of applications

• Employs some efforts to consolidate applications

• Takesadvantageofnewefficiencymethodologies in application development

• Identifiesandmonitorssomegreenmetricsaroundpower,cooling,andairflow

• Considersandtracksgreenimpactalongwithotherbusinessobjectivesindata center

• Shares applications and related platforms across business units

• Softwaredevelopmentlifecycleregularlyusesnewefficiencytechnologies(e.g.,virtualization, SOA and other sharing andflexibletechnologies)

• Followsgreentechnologystandardsthroughout organization

• Fullyleveragesenterprisesoftwareacross the organization to maximize use/capabilities

• Activelytracksgreenmetricsagainstbusiness green objectives

• Participates in ENERGY STAR recognitionprogramforenergyefficientdata centers

• All data center build outs or contracts must pass through a rigorous green evaluation process before approval

• SeekstoimproveENERGYSTARscoresfor all data centers

• Employs effective ‘big data’ strategies to analyze sustainability data and metrics

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Dimensions Initiating Progressing Excelling Leading Transforming

SUPPLY CHAIN

20 Transportation / Logistics

• Awareofimpactoftransportationdecisions on the environment

• Baseline emission measurements• Sustainable transportation initiatives

are in early planning stages

• Employs improved blend of rail, road, and air transportation modes

• Includes capacity management as a criteria in managing distribution

• Uses or tests some alternative fuels in transportation vehicles

• Participates in EPA SmartWay

• Packagingandtransportationsystemdesigns concurrently occur to optimize flowofgoodsandminimizespaceandenergy usage

• Develops innovative shipping mechanisms to maximize load capacity

• Uses reusable containerization for nearly all products

• Recognized EPA SmartWay Carrier and Shipperwithahighrankingscore

• Demonstrates reduction of environmental impact by optimizing transportationandwarehousenetwork

• Replacesvehiclefleetwith‘greenvehicles’

• Considersemissionswhenselectingtransportation vendors

• Forms transportation alliances to maximize load capacity and minimize waste

• Recognized excellence in reducing environmental impact from transportation strategies

21 Supplier Engagement for Responsible Sourcing (see the ELEVATE Responsible Sourcing Model)

• Supplier code of conduct addresses various environmental aspects

• Auditssuppliersaccordingtoariskprofileorinresponsetoproblems

• Incorporateskeysustainabilityconsiderations into initial supplier onboarding and ongoing sourcing decisions

• Supplier code of conduct incorporates all dimensions of recognized industry standards (e.g., SA8000)

• Delivers some training or guidance to suppliers on sustainability opportunities

• Performs mix of internal and external audits on a regular basis according to supplierriskprofile

• Workscloselywithsupplierstoremediate sustainability issues

• Assesses all suppliers according to sustainability criteria

• Supplier code of conduct includes measurable sustainability metrics that auditorscanobjectivelycheck

• Employsexpertauditorstochecksuppliersaccordingtosupplierriskprofile•Trackssuppliersustainabilityperformancequantitativelyovertime

• Activelycollaborateswithsuppliersto capture shared savings through improvements in sustainability performance

• Develops remediation plans in collaborationwithsupplierandcloselymonitorsquantitativeprogressagainstthem

• Sourcing/merchandise teams use sustainability scorecards as integral part of sourcing decisions

• Hosts annual “Sustainability Summit” withkeysuppliers/vendors

• Encourages vendors to improve and report on sustainability metrics (e.g., energy,waste,water)oftheirproducts,possiblyleveragingserviceslikeCDPSupply Chain

• Workscloselywithsupplierstomonitorsubcontracting arrangements

• Encourages sustainable manufacturing practices for all products and suppliers, withafocusonensuringsuppliers’financialviability

• Relevant departments test and actively partnerwithresearchgroupsorvendorstodesignnextgenerationequipmentforsustainable performance

• Definesandexecutesonappropriateactionswithsuppliersfailingtomeetperformance criteria

22 Supply Chain Transparency & Traceability

• Publishes information on suppliers orcountryoforigintocomplywithrelevantlaws

• Publishes some summary audit statistics (e.g., percentage of factories non-compliant)

• Publiclydiscloseswhereproductsaremade(withoutfactory-specificdetails)

• May disclose some anecdotal factory-specificinformation

• Makesauditresultsavailablepublicly(e.g., through FLA)

• Supply chain information is available through a number of channels/media

• Publishes supplier code of conduct and summary of monitoring and enforcement mechanisms

• Efforts to trace supply chain from suppliers to subcontractors/vendors backtorawmaterialssuppliers

• Active member of supply chain transparency organizations (e.g., CDP Supply Chain, TSC, SAC)

• Explains challenges in the supply chain through a number of channels (e.g., website,reports)

• Workswithcrediblethirdpartiestointroduce sustainable best practices (e.g., FSC, MSC)

• Activelymarketssupplychainstoriestoconsumers

• Publishes list of factories and locations, withstories,photographs,orotherinformationonallkeysuppliers

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Dimensions Initiating Progressing Excelling Leading Transforming

PRODUCTS

23 Product & Packaging Design and Development

• Minimalattentiongiventopackagingoptimization

• Ad hoc measures employed to reduce product impacts such as the purposeful merchandising of products using crediblecertifications(e.g.,FSC,fairtrade) and general pronouncements or guidelines to suppliers to minimize productandpackagingimpacts

• Employs credible criteria to evaluate sustainability performance of most major product categories

• Collaborateswithsupplierstoidentify,develop,andmarketproduct/serviceinnovations that further reduce environmental impact

• Employs credible criteria to evaluate sustainability performance of all major product categories

• Sets meaningful business-relevant revenue targets for product sustainability performance (e.g., 30% of saleswillcomefromproductsthatmeetdesign criteria)

• Designsallproducts,orworkswithall suppliers, for a “cradle to cradle” outlook,usingtoolsbasedonlifecycleand hazard assessments

• Publicly reports on product sustainabilitygoalsandthenetbenefitsof product sustainability performance

24 Owned Manufacturing / Production

• Basic understanding of sustainability principles and practices

• Sustainability principles have been incorporated to meet regulatory requirements

• Developsplansandpoliciestomakemanufacturing processes more sustainable (including agricultural practices as applicable)

• SetstargetsforkeysustainabilityKPIs(e.g.,waste,GHG,water)inclusiveofrawmaterial,manufacturing,andotherproduction activities

• Measures against those targets and communicates success and improvement opportunities to facilities

• BenchmarkskeyenvironmentalandsocialsustainabilityKPIsagainstindustry standards and exceeds industry average

• Sets plans to achieve aspirational goals(e.g.,100%renewablepower,zerowaste,zeroaccidents)

• Usesrenewableenergysourcesinmostmanufacturingprocesseswithlimitedexceptions

• Achievesworldclasssustainabilitymanufacturing/production levels

• Publicly reports success against aspirational goals

25 Product & Packaging End-of-Life Stewardship

• Adhocrecyclingorproducttake-backinitiatives available to customers

• Some limited mechanisms in place todesignown-brandproductsthatconsider reuse or recyclability at end of useful life

• Offersselectrecyclingandproducttake-backbinsinsomeretaillocations

• Designssomeown-brandproductstoconsider reuse or recyclability of product at end of useful life

• Offersselectrecyclingandproducttake-backbinsinallretaillocations

• Designsawholelineofown-brandproducts to consider reuse or recyclability at end of useful life

• Collaborateswithotherstakeholders(e.g., trade associations, civil society, competitors, value chain) for system change to upcycle/recycle product components

• Marketsproducttake-backservicesto consumers as a competitive differentiator

• Designsallown-brandproductstoconsider reuse or recyclability of product at end of useful life

• Actively retrieves products at the end of life for reuse and recycling

• Measures and reports the percentage of reclaimedproductsandtheirpackagingmaterials for each product category

• Begin designing and selling consumer servicestomitigatetheone-wayconsumption cycle

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Dimensions Initiating Progressing Excelling Leading Transforming

SUSTAINABILITY & CSR ISSUES

26 Employeeengagement,wellbeing,development, andinclusion

• Complieswithworkerhealth&safetyregulations

• Definedemployeecodeofethicsorcodeof conduct

• Providesbasicwellnessprogramslikelocalcoursesandawarenesscampaigns

• Employeemedicalbenefitsandleavesof absence offered at industry norm

• Definedemployeejobsatisfactionorengagementprogram;periodicsurveysand other mechanisms to measure job satisfaction

• Wellnessprogramincludesbenefits(e.g., disease management coaching, nutrition counseling, tobacco cessation, healthriskassessments,ergonomicworkstationsupport)

• Employeebenefitsincludeindustrynorm offerings above medical and leave(e.g.,flexibleworkarrangements,tuition reimbursement, savings and retirementbenefits,anEmployeeAssistance Program, and Employee Discounts)

• TalentManagementProgramwitha competency model in place, development discussions and planning, andanactivereviewprocess

• Strategic employee engagement and professional development programs includereal-timefeedbackmechanisms,and are tied to company values, a competencymodel,andworkforce/development planning

• Company recognition programs aligned to values and performance

• AffinityorEmployeeResourceGroups(ERGs) to connect employees around common interests

• Wellnessprogramsincludefitnesschallenges, online health management tools, or on-site clinics

• Employeebenefitsincludecompetitiveelements (e.g., student loan assistance, paid family leave, “paternity” leave, and healthcare education)

• Definedworkplaceinclusionprogramthatactivelydrawsonemployees’diversityofknowledge,resources,abilities, and experience

• Goal to be best-in-class employer• Career development programs (e.g., crowd-sourcedandactionablefeedback,company universities,

mentoring programs, talent mobility, and developmental assignments that areintegratedwithsuccessionandworkforceplanning)

• Wellnessisintegratedwithcompanyculture and includes programs such as on-the-clockfitnessbreaks

• Employeebenefitsincludepace-settingelements (e.g., unlimited vacation)

• Employeedevelopment,wellbeing,andinclusion is recognized for its return onvalueandintegratedwithcompanystrategy and values

• Career development and talent management is based on HR analytics and includes next level practices (e.g., gamification,mobilityassignmentswithexternalstakeholders,mobiletalentpools, individual customization)

• Global leadership candidates participate in ERGs and the company leverages cognitive diversity to drive innovation

• Wellness is no longer a program, but acultureofwellbeingthrivesandenvironmental health is also of focus

• Benefitsincludeprogressiveofferings(e.g., telemedicine, free electric car charging)

27 Energy & GHG Emissions(see the RILA Retail Energy Management Leadership Model

• Energy usage is measured or analyzed in adhocways

• Measures and analyzes current energy usage and future projections of retail portfolioinmanualorfragmentedway

• Outdated,inefficientequipmenthasbeen replaced

• Undertakessomeinvestigationofalternative energy sources

• Drawsaminimalamountofenergyfromalternative sources

• Developscoordinatedenergyefficiencypolicies across operations and value chain

• Designs and executes systematic energy management program (e.g., datatracking,trainingofrelevantemployees)

• UsesonlyenergyefficientrefrigerationequipmentandtracksGHGemissionsofequipmentcontinually

• Capital expenditure decisions consider energy cost implications

• Relies on alternative energy for 25% or more of energy needs, through combination of RECs and onsite generation

• Sets internal carbon price as means to measure and reduce GHG emissions

• Relies on alternative energy for 40% or more of energy needs, through combination of RECs and onsite generation

• Joinsexternalalliancestodriveenergy/climate policy

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Dimensions Initiating Progressing Excelling Leading Transforming

SUSTAINABILITY & CSR ISSUES (continued)

28 Water & Wastewater

• Adhocstrategytoreducewaterconsumption in retail operations

• Measurescurrentwaterusageofstores,warehouses,distributioncenters,andofficesacrosssomeportionoftheportfolio

• Conductscomprehensivewaterfootprintacross retail portfolio, including stores, warehouses,distributioncenters,andofficestounderstandwhereimpactslie

• Efforts and technologies in place to minimizecompany’sdirectwaterusage,suchaslow-flowfaucets

• Conductscomprehensivewaterfootprint exercise across value chain, to develop reduction strategy

• Efforts and technologies in place to recyclewater

• Identifieswaterwithdrawalsourcesandcommunicateslocalizedrisks

• Pursuesinnovativewaterreductiontechniquessuchasgreywaterrecycling,xeriscaping,stormwatermanagement,etc.

• Identifieswaterwithdrawalsourcesandremediatesanylocalizedrisks

29 Waste & Recycling

• Awareofmainsourcesofwastegeneration in company operations

• Measureswastefootprintofstores,warehouses,distributioncenters,andofficesacrosssomeportionoftheportfolio

• Ad hoc efforts to reduce and recycle wasteatstores,warehouses,distributioncenters,andoffices

• Measureswastefootprintacrossretailportfolio,includingstores,warehouses,distributioncenters,andoffices,comprehensively

• Implementswasteminimizationprograms involving reduction, reuse, andrecyclingatstores,warehouses,distributioncenters,andoffices

• Implementsleadingwastetechnologiesand policies (e.g., balers for hard-to-recycle materials, customer recycling options)

• Waste reduction targets and continuous improvement method in place for products, supply chain, and operations

• Commitmenttozerowastegoalsatsome retail locations

•Conductscomprehensivewastefootprint exercise across value chain

• Efforts in place to completely remove hazardouswastefromretailoperations,product development, and supply chain

• Commitmenttozerowastegoalsacrossall locations

30 Chemicals & Toxics

• Complieswithenvironmentalregulations

• Maintains a list of regulated chemicals or a restricted substance list (RSL)

• Undertakesbeyond-compliancemeasures to reduce the use of certain chemicals and toxics across the value chain

• Definesrelevantmetricstomonitoruse of certain chemicals and toxins throughout value chain

• Definesgoalsarounduseofchemicalsand toxics in products

• Understands sources of toxins throughoutvaluechainandwhytheyare present

• Establishes green chemistry program withthegoalofreducingtoxicsacrossthe value chain

• Conducts comprehensive assessment of chemicals in products and processes, withanevaluationofhazardandexposure potential

• Establishesallianceswithindustrypeers to further green chemistry innovation

• Communicates green chemistry policies to suppliers

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