15 May 2012 Gap Shareholder Questions Gap Executives over Sustainability Push’s Harm to Consumers and Small Suppliers

San Francisco, CA / Washington, D.C. – Today, at the Gap Inc. annual shareholder meeting in San Francisco, California, the National Center for Public Policy Research questioned company executives about the clothing retailer’s sustainability efforts and their effects on small businesses and consumers.

“If RILA and its member companies get their way, American consumers are in for a rude awakening at the checkout counter,” said National Center General Counsel Justin Danhof. “RILA’s sustainability plan would cause manufacturing costs to necessarily skyrocket as suppliers are forced to switch to recyclable materials, reduce water and energy use, hire more staff and spend more on compliance.”

Gap Inc. is a member of the Retail Industry Leaders Association (RILA) – one of the country’s largest trade organizations, representing more than 200 companies and many of the largest American retail chains. Earlier this year, RILA issued the first ever industry-wide sustainability report in which it pressured its member organizations to reduce their environmental impact by reducing greenhouse gas usage.

Danhof asked Gap’s Chief Executive Officer Glenn Murphy if he was concerned that these increased costs would be passed onto consumers and may drive some smaller suppliers out of business.

“Proud of his company’s environmental work, Murphy stated that Gap worked with RILA on common causes, but did not need RILA to tell Gap to work on these environmental issues – Gap has been working towards global sustainability and social responsibility for years,” said Danhof. “Murphy stated that his company would work with suppliers, and not against them, to implement any new environmentally friendly programs. Murphy pointed to the fact that his Gap has made investments and spent company money to help suppliers conserve and clean water around the world.”

“It was nice to hear that Gap makes investments and works with suppliers to implement sustainability initiatives, rather than forcing suppliers to spend the full burden,” said Danhof. “However, Murphy did not answer whether those costs are eventually passed to consumers in the form of higher prices. Gap customers have a right to know if they are paying a premium for these ‘green’ company investments.”

“Unemployment remains stubbornly high, and consumer spending is down. RILA and Gap’s sustainability push will only exacerbate these important economic indices and further delay the so-called recovery. Gap and other RILA members should reevaluate their sustainability efforts and advance pro-consumer reforms,” said Danhof.

A transcript of the exchange can be found at https://nationalcenter.org/GapShareholderMeeting2012Transcript.pdf. An audio recording of the exchange is available on YouTube at http://youtu.be/FKTJ_BDWEkg.

Gap, Inc. owns the brands Gap, Old Navy, Banana Republic, Piperlime and Athleta.

To learn more about RILA’s sustainability push, read here.

The National Center for Public Policy Research is a Gap Inc. shareholder.

The National Center for Public Policy Research is a conservative, free-market, non-profit think-tank established in 1982. It is supported by the voluntary gifts of over 100,000 individual recent supporters. In 2011, it received over 350,000 individual donations. Two percent of its revenue comes from corporate sources. Contributions to it are tax-deductible and greatly appreciated.

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