planet
reduce our carbon footprint
We aim to reduce our impact on the environment for future generations through our multi-pronged climate and environmental strategy and ambitious goals.
energy & emissions
Climate action plays a crucial role in addressing our approach to priority initiatives, such as raw material sourcing and supply chain resilience. The efforts we are taking to mitigate climate change support our human rights and responsible sourcing initiatives. As such, our approach to emissions reduction spans our operations, supply chain, and product lifecycle. We set targets validated by the Science Based Targets initiative (SBTi) to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions 50% by 2030 versus 2019 baseline, while also requiring 77% of our purchased goods and services vendors by spend to set science-based targets by 2027. To strengthen accountability, we prioritize gathering primary GHG data and obtain third-party limited assurance for our Scope 1 and 2 emissions, water usage, and waste volume disclosures.
In 2024, we accelerated our climate action strategy as we prepare for increasingly stringent regulatory requirements and growing stakeholder expectations around emissions transparency.
TOTAL EMISSIONS (metric tons CO2e)
Carter’s Emissions Sources by Scope
SCOPE 2
INDIRECT
Purchased
electricity usage
SCOPE 1
DIRECT
Fuel combustion,
fugitive emissions
SCOPE 3
INDIRECT
Upstream and downstream
value chain emissions*
Stores, distribution centers and corporate offices controlled by Carter’s
*Purchased goods and services, fuel and energy-related activities, upstream transportation, processing of waste disposal, business travel, employee commuting and end-of life treatment of sold products.
Carter’s Emissions Sources by Scope
pinch to zoom in
scope 1 and 2 emissions
Our approach to reducing direct emissions focuses on operational efficiency, renewable energy, and new technologies across our retail locations, distribution centers, and corporate offices.
To achieve our 2030 emissions reduction target, we believe our strategy balances quick-win efficiency improvements with long-term structural changes, designed to maintain business momentum while progressively decarbonizing our operations. In 2024, Scope 1 and 2 emissions decreased by 26% from a 2019 baseline, through direct reduction initiatives such as:
- Completing LED lighting retrofits for over 40 stores
- Launching a store remodel initiative incorporating energy-efficient design principles
- Maintaining Leadership in Energy and Environmental Design (LEED) Gold certifications for key facilities
- – Atlanta Headquarters
- – Hong Kong Sourcing Office
- – Vietnam Sourcing Office
As a member of the EPA Green Power Partnership for the past two years, we strategically use RECs to complement our direct reduction efforts. Our REC strategy:
- Bridges the gap between current emissions and reduction targets
- Supports development of renewable energy markets
- Provides flexibility as we transition to more permanent solutions
14
34,000 RECs is equivalent to 13,380 MTCO2e.
Historical and Expected Scope 1 and 2 GHG Emissions Through 2030
26%
Goal
Reduce absolute Scope 1 and 2 GHG emissions 50% by 2030 from a 2019 baseline and achieve net zero in our direct operations by 2040
2024 PROGRESSGoal
26% reduction of Scope 1 and 2 emissions since 2019
We expect our Scope 1 and 2 emissions to remain stable compared to 2023 once our REC purchases from 2025 have been applied to our 2024 emissions inventory.
climate risks & opportunities
Our annual climate risk assessments, aligned with the Task Force on Climate-related Financial Disclosures (TCFD), evaluate physical and transition risks across our stores, distribution centers, suppliers, and cotton sourcing. Through these assessments, we gain insight into the short-, medium-, and long-term adverse impacts that climate change could have on our business and operations, along with the potential strategic business opportunities. In 2024, we began working with industry experts to quantify these potential impacts, using the IPCC’s climate change scenarios—the Shared Socioeconomic Pathways. Our 2024 risk assessment focused on modeling the financial impacts of previously identified risks and opportunities. Our complete TCFD table can be found in the Disclosure Index.
Scope
- Carter’s owned operations—stores, distribution centers
- Value chain—suppliers, cotton sourcing
Time Frame
- Short (S): 0-1 year (2025)
- Medium (M): 2-10 years (2035)
- Long (L): 11-25 years (2050)
Emissions Scenarios
- Physical Risk Scenarios, including Representative Concentration Pathways (RCPs) 4.5 & 8.5
- Bespoke transition scenarios aligned with 1.5°C
Risk Mitigation
- Include climate risk assessments within new store evaluation process, alongside financial and market considerations
- Incorporate sustainability questions into consumer surveys to gain insights into market perception
- Monitor policies and regulations, and advance internal controls on data collection and reporting
Impact Areas16
PHYSICAL RISKS
- Acute: Extreme weather events (e.g., extreme heat, flooding, wildfires, hurricanes) can damage store infrastructure, cause inventory loss, and lead to temporary store closures; can affect value chain and consumer spending (S, M, L)
- Chronic: Increased temperatures, changing rainfall patterns, sea level rise, water stress, etc., can affect distribution, maintenance, and utility costs at retail stores (S, M, L)
- Potential Financial Impacts: ~$40-$50M
TRANSITION RISKS
- Failure to meet or properly report progress on our climate targets (M, L)
- Additional compliance costs due to current and emerging regulatory requirements around topics such as EPR and GHG emissions (S, M, L)
- Increased consumer awareness of environmental issues driving the need for more sustainable products (S, M, L)
- Increased raw materials costs for key fabrics such as cotton (S, M, L)
- Potential Financial Impacts: Up to $215M
OPPORTUNITIES
- Expansion of the sustainable products market, through expansion of Carter’s brands Little Planet and PurelySoft (S, M, L)
- Reduction of packaging, such as polybags (S, M, L)
- Supplier engagement driven resiliency through improved collection of their GHG emissions and climate target reporting via Higg FEM (S, M, L)
- Potential Financial Impacts: ~$5-$145M
16
The potential financial impacts for all impact areas are discounted values in the year 2035.
