Global apparel retailer Gap Inc. (NYSE: GPS) today announced that it has signed a 90 Megawatt (MW) virtual power purchase agreement (VPPA) for the Aurora Wind Project with Enel Green Power North America, marking one of the largest offsite renewable energy contracts by an apparel retailer. The 12-year agreement is Gap Inc.’s latest renewable energy deal and will enable the company to reach its 2020 goal to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions for its owned and operated facilities by 50 percent compared to 2015. The company also announced it has set a goal to reach 100 percent renewable energy across its global owned and operated facilities by 2030.
“We have a responsibility to reduce our climate impact. For Gap Inc., being a part of the climate solution means making strategic investments in clean energy generation."
"Today we have secured a path to achieving our 2020 goal, but we must do more. I’m proud to commit to renewable energy for 100 percent of our stores, headquarters and distribution centers globally by 2030,” said Art Peck, president and chief executive officer, Gap Inc.
Gap Inc. operates more than 3,300 stores worldwide, however the vast majority of its distributed store fleet are leased sites located in buildings and malls owned by landlords, limiting the company’s ability to implement onsite renewable energy assets. The agreement with Enel Green Power allows Gap Inc. to meet its renewable energy goal by aggregating its distributed electricity load in the U.S. and purchasing wind energy equivalent to the energy needs of over 1,500 retail stores in its global real estate portfolio. The agreement provides benefits both to the local grid by adding new clean generation, while also stabilizing operating costs for Gap Inc. in the face of fluctuating energy prices.
The wind electricity output purchased by Gap Inc. from the 90 MW portion of Enel Green Power’s 299 MW Aurora project is expected to total approximately 374 gigawatt hours (GWh) each year. It will reduce GHG emissions equivalent to the carbon reduction of removing 60,000 passenger cars from the road annually.
Gap Inc. was advised on this VPPA by Schneider Electric Energy & Sustainability Services, who assisted the company in its project selection and negotiations. “Gap Inc. has shown tremendous and ongoing sustainability leadership in the apparel industry,” said John Powers, VP of Strategic Renewables for Schneider Electric. “Pursuing an offsite VPPA was an ideal solution to address the company’s unique real estate footprint, which lacks owned rooftop space, and achieve its carbon reduction targets while creating both business and environmental value. We want to congratulate Gap Inc. on this important project that will contribute to a clean energy future for all.”
Enel Green Power North America—a leading owner and operator of renewable energy plants with a managed capacity of over 5 GW—will build, own, and operate the Aurora Wind Project located in Williams and Mountrail counties in North Dakota. Once completed, the total project will be able to generate approximately 1.3 terawatt-hour (TWh) annually, while avoiding the emissions of around 880,000 tons of CO2 per year. The project is expected to enter operation by the end of 2020.
“This partnership with Gap Inc. once again demonstrates how global brands are increasingly turning to us for our extensive expertise in creating flexible and customized solutions that address unique renewable energy needs,” said Antonio Cammisecra, Global Head of Enel Green Power. “With partnerships like this one, which create immediate returns while furthering emission reduction strategies, Enel Green Power once again reaffirms the strong bond between sustainability and value creation.”
In addition to meeting its 2020 Scope 1 and 2 GHG emissions-reduction goal, Gap Inc. is also establishing a Scope 3 goal to reduce upstream and downstream emissions, including in its supply chain. The company has committed to setting a Science Based Target, including addressing Scope 3 emissions, which will be announced later this year. In 2018, Gap Inc. was one of 43 founding signatories of the UN’s Fashion Industry Charter for Climate Action to step up the industry’s collaboration towards a cleaner, low-carbon future, including a commitment to reduce aggregate Scope 1, 2 and 3 greenhouse gas emissions 30 percent by 2030 compared to a 2015 baseline.
Today’s announcement is the third renewable energy contract signed by Gap Inc. Earlier this year, the company joined with Bloomberg, Cox Enterprises, Salesforce and Workday to sign a joint 42.5-megawatt renewable energy deal, with Gap Inc.’s share of the project addressing the energy footprint of all Athleta stores and operations. Previously, Gap Inc. signed a 20-year power purchase agreement with SunPower for 3 megawatts of onsite solar at its distribution center in Fresno, California.
As part of Gap Inc.’s corporate sustainability strategy, the company collaborates throughout its value chain and across government, business and civil society to address systemic challenges. The company was among the first to implement the Sustainable Apparel Coalition’s Higg Index with its supply chain and, in 2017, committed to a science-based carbon reduction target to align its climate goals with the scientific consensus and core commitment of the Paris Agreement to limit global warming below 2 degrees Celsius. The company is also a member of the Ceres BICEP policy network (Business for Innovative Climate and Energy Policy) to address urgent climate and clean energy risks for global businesses, and also joined with other businesses to form the We Mean Business coalition to improve resiliency in its operations and supply chains.
For more information on Gap Inc.’s global sustainability initiatives, please visit www.gapincsustainability.com.