Gap Inc. continues its commitment to transparency in its third Social Responsibility Report



    Highlights progress on ethical sourcing, environmental sustainability and
    community investment initiatives that are good for business and the right
    thing to do

    SAN FRANCISCO, Aug. 16 /CNW/ - Gap Inc. (NYSE:   GPS) today released its
third and most comprehensive Social Responsibility Report, highlighting the
company's commitment to social responsibility. This year's report, covering
fiscal years 2005-2006, details the company's progress and goals for
initiatives involving its supply chain, community investment, employees and
the environment.
    From 2005 to 2006, the number of approved garment factories earning the
company's highest compliance ratings continued to increase. In fact, 61 per
cent of Gap's contracted garment factories are currently rated "Good" or
"Excellent," indicating that progress is being made to improve the working
conditions at many factories in the company's supply chain.
    "We're making a lot of changes at Gap Inc. but, as our Social
Responsibility Report demonstrates, doing business the right way is still
extremely important to us," said Robert Fisher, former interim CEO and current
member of Gap Inc.'s board of directors. "We have an unwavering commitment to
our social responsibility program; it's good for business and we know it's the
right thing to do."
    Gap Inc.'s recently appointed chairman and CEO Glenn Murphy said, "Gap
Inc.'s commitment to doing business in a socially responsible manner is a
fundamental part of who we are, especially for our employees and our
customers. Reflected in this report is the hard work and passion of our
employees to uphold our brand values, which truly set Gap, Old Navy and Banana
Republic apart as socially conscious brands."
    The new report is designed around provocative questions highlighting the
complex issues that Gap Inc. - and the entire apparel industry - faces and
illustrates the company's commitment to ongoing dialogue and collaboration.
    "We believe we should go beyond the basics of ethical business practices
to embrace our role as a global citizen," said Dan Henkle, senior vice
president of Social Responsibility, Gap Inc. "Each section of the report
explains our progress in key areas and raises new challenges we've identified
through our experiences. We believe that our transparency will encourage other
companies to take similar actions."
    Gap Inc. engaged a number of stakeholders for feedback and input,
including the Public Reporting Working Group. Six organizations - the As You
Sow Foundation, Calvert, the Center for Reflection, Education and Action,
Domini Social Investments, the Interfaith Center on Corporate Responsibility,
and Vectra International - comprise the group. The Public Reporting Working
Group has helped Gap Inc. explore opportunities for greater transparency and
sustainability of its expanding social responsibility efforts over the past
five years.
    "This new report continues to set the pace for public reporting about
global labour standards compliance," said Ruth Rosenbaum, PhD, executive
director, Center for Reflection, Education and Action, Inc., on behalf of the
Public Reporting Working Group. "Gap continues to demonstrate a dynamic
approach to factory compliance, focusing on auditing as well as a broader
framework including worker empowerment, capacity building, and long-term
partnerships to reduce the impact of factory relocations. But it is
disappointing that three years after Gap's first report, so few companies have
issued anything approaching the credibility and transparency of Gap's initial
effort. With few exceptions, the state of public reporting on supply chain
compliance has changed very little."

    The full report is available online at
    gapinc.com/socialresponsibilityreport.

    Supply Chain
    -------------
    Gap Inc. is committed to improving working conditions in the more than
2,000 garment factories with which it contracts. The company has a team of
more than 90 people around the world who work to improve the lives of garment
workers. To ensure these factories were adhering to the company's standards,
last year, Gap Inc.'s internal compliance team conducted 4,316 inspections in
2,053, or 99.4 per cent, of the garment factories.
    In 2006, Gap Inc. partnered with Women Working Worldwide (WWW) to assess
the company's purchasing practices to understand how to make better decisions
as an organization. Findings from the assessment will guide development of
training materials to help production planners and merchants understand the
impact that their decisions can have on the working conditions of factories.
This work is an ongoing priority for the company.
    "Gap Inc. clearly puts an impressive amount of resources into ethical
trade, and its work with Women Working Worldwide on purchasing practices is
truly pioneering," said Dan Rees, Director, Ethical Trading Initiative (ETI).
"Gap is playing a leadership role in encouraging companies to investigate ways
of integrating their ethical trade principles into core business practices."

    Environment
    ------------
    The new report introduces the company's new environmental strategy -
summarized by the acronym "ECO" - which focuses Gap Inc.'s efforts on three
key areas: Energy conservation; Cotton/sustainable design; and Output/waste
reduction.
    Between 2003 and 2006, the company decreased energy use in U.S. stores by
8.7 per cent and increased its paper and cardboard recycling in North American
stores, distribution centers and headquarters by more than 90 per cent. And
this year, Gap brand introduced new products in its stores in the U.S., U.K.,
Canada and France made from 100 per cent organic cotton.

    Community Investment
    ---------------------
    Through Gap Foundation's efforts to serve communities where the company
does business, employees contributed substantially more time to non-profit
organizations. Employees nearly tripled the hours volunteered, from just over
72,000 hours in 2004 to almost 220,000 hours in 2006.
    Beginning with the 2005-2006 Social Responsibility Report, Gap Inc. will
report comprehensively on its social responsibility efforts every two years.
This will allow the company to focus its efforts on affecting positive,
lasting change and report more meaningful results. The company's next report
is scheduled for release in 2009; however, the company will continue to
provide ongoing updates on gapinc.com between published reports.

    About Gap Inc.

    Gap Inc. is a leading international specialty retailer offering clothing,
accessories and personal care products for men, women, children and babies
under the Gap, Banana Republic, Old Navy and Piperlime brand names. Fiscal
2006 sales were $15.9 billion. Gap Inc. operates more than 3,100 stores in the
United States, the United Kingdom, Canada, France, Ireland and Japan. In
addition, Gap Inc. is expanding its international presence with franchise
agreements for Gap and Banana Republic in Asia and the Middle East. For more
information, please visit gapinc.com.





For further information:

For further information: or to request an interview, please contact:
Victoria Kirk, Gap PR (Canada), (416) 355-2321, victoria_kirk@gap.com

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