Energy Efficiency

Taking Action to Minimize Our Energy Use

Establishing clear baselines. Conducting annual energy efficiency audits. Continually upgrading equipment and processes. Implementing proven reduction programs. Tracking and measuring improvement. VF’s energy efficiency program is becoming an important competitive advantage.

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VF’s energy efficiency efforts focus first on our owned and leased facilities, including manufacturing plants, retail operations and distribution centers. Below are examples of VF’s initiatives at our owned operations and beyond.

MANUFACTURING

21200VF is committed to finding ways to reduce our environmental footprint in our manufacturing facilities.

From 2009 to 2015, VF has reduced energy at our owned and operated manufacturing sites with a 5 percent reduction of natural gas use and 2 percent reduction in electricity use. This reduction has been achieved by installing more efficient lighting and HVAC systems, lighting sensors, variable speed controllers and timers. These sites have also replaced older dryers with updated burner designs and profiled drying times for specific products. Additional operational improvements have reduced partial loads and reduced dryer cool down in between loads; this has reduced natural gas consumption and carbon emissions.

DISTRIBUTION AND TRANSPORTATION

21201VF works to maximize container utilization to increase fuel efficiency.

Since 2009, VF has saved more than one million (freight truck) transit miles by maximizing container utilization. Reducing empty space reduces the number of trips required to ship our products, saving fuel and reducing GHG emissions. In some divisions, we have created cartons with new dimensions and standardized others to further optimize space

We have researched and implemented upgrades to our vehicle fleet in order to improve fuel efficiency, including investing in more technologically advanced tires and enhanced vehicle aerodynamics. VF Jeanswear instituted several measures including reducing the fleet speed limit and using cruise control, air shields for tractors and low-profile tires at all wheel positions, increasing fuel economy by about 1 percent.

These efforts saved more than one million transit miles over a period of four years.

VF’s distribution centers continuously implement energy efficiency programs.

We have conducted lighting retrofits and installed skylights, invested in daylight and motion sensors, improved natural air circulation, evaluated HVAC and conveyor system performance and worked to improve general operations to maximize energy performance.

Energy audits provided the next level of energy and carbon saving projects. A wireless sub-metering project resulted in a fast payback at the Seminole DC. Insulated dock doors and seals were two more examples of how the Seminole DC was able to reduce their carbon footprint while increasing the bottom line.

We have entered into numerous energy curtailment agreements with participating utility grid providers in the U.S. to reduce energy usage during peak hours. This energy savings helps alleviate the need to build additional power generation stations.

Lastly, we have committed to pursuing LEED or BREEAM certification at new distribution centers. Our new distribution center in Hackleburg, Alabama, which replaces a facility destroyed by a tornado in 2011, was certified LEED Gold in 2014, while distribution centers (DCs) in Kunshan, China, Sint-Niklaas, Belgium, and Mexico City have met – or will soon meet – LEED standards. VF currently has 12 LEED certified buildings and one BREEAM certified building.

RETAIL

21202The Timberland® brand was our first brand to achieve LEED for retail certification.

With our direct-to-consumer business expected to reach 30 percent of VF’s total revenue by the end of 2017, we are dedicated to implementing best practices across this platform to meaningfully reduce our energy use per square foot as we expand our owned-retail footprint worldwide.

In 2008, the Timberland® brand became the first brand to achieve LEED certification for a retail location, designating outstanding environmental performance at the brand’s stores. Two years later, the Timberland® brand again led the way by installing LED spotlights in over 98 percent of its North American stores, reducing lighting energy use by 80 percent in the first year alone. Currently, all new stores and remodels for The North Face®, Vans®, Nautica® and Kipling® brands are using or installing LED lighting. LEDs have gone mainstream for VF as a way to provide great lighting to our products and reduce our environmental impact.

In our European retail locations, we have taken steps to increase our sustainability processes by requiring that contractors follow stricter guidelines, using more eco-friendly inks, materials and heating and ventilation systems. In addition, we have increased associate training to ensure more recycling of all waste streams.

VF also recognizes the environmental implications of e-commerce and is exploring ways to mitigate those impacts. The Timberland® and The North Face® brands currently offer carbon offsets for customers that buy their products online.

OFFICE LOCATIONS

21203Several VF facilities are equipped with state-of-the-art solar panels to help reduce our environmental footprint.

VF’s Outdoor & Action Sports coalition headquarters in Alameda, California, was awarded LEED Platinum certification in 2013. Its innovative energy efficient features include a one MWh energy system that draws from solar parking cover panels, solar wind shades, energy efficient glass that uses natural light to heat the facility, and a unique HVAC system that draws 100 percent fresh air into the space.

Our global headquarters in Greensboro, North Carolina uses a solar hot water system to supplement building heat. Solar heating has displaced a significant portion of the natural gas heating; consumption and costs have been reduced by more than 50 percent since 2009.

SPOTLIGHT

VF’S INTERNATIONAL HEADQUARTERS IN STABIO, SWITZERLAND

Our new international headquarters in Stabio, Switzerland, is targeting LEED Gold certification. The building features:

• Renewable Energy Sources: Approximately 10 percent of the energy needed to power the office (135,000 kWh annually) is generated by photovoltaic panels on the roof of the building. The rest of the energy used at the facility are hydroelectric and eolic power purchased from external sources.

• Energy Savings and Efficiency: The HVAC system is 50 percent more efficient than traditional models due to optimized HVAC equipment, heat recovery units and a free cooling system.

• Lighting: The building is equipped with motion sensors and daylight sensors that adjust internal light brightness depending on the level of natural light. In addition, the building uses LEDs extensively and energy efficient lighting where LEDs are not yet available.

• Water Usage: Rainwater tanks with a capacity of 50 cubic meters (13,000 gallons) are used for plumbing and irrigation. Drinking water is sourced directly from the municipality grid.

• Public Transportation Options: A train station in close proximity to the office opened in mid-December 2014, offering associates easy access to public transportation and, thereby, allowing fewer transit emissions.

SUPPLY CHAIN

21205We have partnered with various expert organizations to find ways to continuously increase energy efficiencies in our supply chain.

VF recognizes that our suppliers use a significant amount of energy. The most energy-intensive activities in the apparel and footwear manufacturing process occur at textile mills, where fabric is created, dyed and finished. We are current working on an innovative supplier engagement program to reduce energy consumption at our suppliers’ facilities, especially these high impact textile mills.

In 2012, VF partnered with the Natural Resources Defense Council (NRDC), the Renewable Energy and Energy Efficiency Partnership (REEEP), and International Finance Corporation, a member of The World Bank Group, to engage 24 large Chinese apparel and footwear suppliers in an in-depth energy efficiency program. The program identified opportunities to reduce energy use across all supplier facilities by an average of 20 percent. We are working to extend it to other strategic sourcing locations, such as Vietnam.

Our Approach and Goals

Taking inventory of Our Greenhouse Gas (GHG) Emissions

Renewable Energy

Powering Our Company with Renewable Energy