Environmental Data

¹¹ Carter’s GHG inventory utilizes the operational control approach. As such, reported “Scope 1 emissions” are direct emissions from sources controlled by Carter’s and include stationary and mobile use of fuels such as natural gas, and propane, as well as estimated fugitive emissions from refrigerants used in HVAC equipment. Where possible, direct consumption values were used. However, in instances where consumption was unknown or only partially reported, estimations were made based on average consumption values of similar locations per square foot. ¹² For market-based emissions, Carter’s used emission factors from the latest release of Green-e residual mix (Green-e 2022, updated Oct 2022). Market emission factors are not available for many international facilities. ¹³ The GHG Protocol defines Scope 2 emissions as indirect emissions from the use of purchased electricity and chilling water. Following the GHG Protocol, Carter’s elected to report Scope 2 emissions using both the location and market-based approaches. Carter’s used emissions factors from the latest release of the EPA eGrid emissions factors (eGrid2021, released Jan 2023) to calculate location-based emissions. ¹⁴ Scope 3 emissions are from sources not owned or directly controlled by Carter’s, but are related to Carter’s activities. The GHG Protocol defines 15 Scope 3 categories. Of these categories, the following are included in the reported Scope 3 value: purchased goods and services, upstream transportation, employee commuting, business travel, fuel and energy-related activities, end-of-life treatment of sold products, and processing of waste (landfill waste, recycling, and wastewater). As is commonly understood in the GHG inventory process, Scope 3 emissions tend to be the most difficult to quantify accurately and may require significant estimations due to the complexity of global supply chains. ¹⁵ Total absolute emissions refer to the total GHG emissions released into the atmosphere due to Carter’s activities, as defined by the World Resource Institute GHG Protocol. The total absolute emissions presented here are the sum of the Scope 1, Scope 2 (market-based), and Scope 3 emissions shown in the lines below. ¹⁶ The term “operations” refers to those directly controlled by Carter’s. Values include purchased electricity and fuels. Sources are the same as those listed in “Scope 1 emissions.” Where possible, the calculation used direct consumption values. However, in instances where consumption was unknown or only partially reported, estimations were made based on average consumption values of similar locations per square foot. This value also includes fuel (natural gas, propane). ¹⁷ The reported value is calculated from reported and estimated electricity and fuel usage. Correspondingly, the per-sq-ft number include fuels.

¹⁸ “Direct” refers to waste generated at Carter’s operated distribution centers and retail stores. Where possible, Carter’s waste inventory used direct waste generation values provided by each location. However, in instances where waste generation was unknown or only partially reported, Carter’s made estimations based on the average per square foot waste generation value of similar locations and historical data. Unlike water and energy, indirect waste generation values from suppliers are not reported due to uncertainty in data quality. Carter’s is working to better understand the waste generation profile of suppliers. ¹⁹ Due to the location and lease structure of stores, it is difficult for every store to report an annual waste generation value. Between 2019 and 2023, only 10-15% of stores have reported waste values. For stores that could not report waste values, Carter’s extrapolated waste and recycling rates submitted by the stores that were able to track this information. Carter’s is working to improve waste tracking at all locations. ²⁰ Diversion rate equals waste sent to recycling divided by total waste generated.

²¹ “Direct” refers to Carter’s owned operations (e.g., distribution centers, retail stores, corporate offices). Where possible, Carter’s water inventory used direct consumption values. However, in instances where consumption was unknown or only partially reported, Carter’s made estimations based on the average water consumption value of similar locations per square foot. ²² “Indirect” refers to the operations of Carter’s suppliers. Due to the uncertainty of supplier information, water use can be different year over year. Carter’s is exploring the reasons for this and is committed to improving data quality within the Company’s environmental reporting framework and supply chain. Outliers in data have been excluded based on assumptions due to potential errors in billing by utility companies.