Climate and Energy

We recognize that companies can and must play a significant role in helping mitigate the impacts of climate change.

Ross established a near-term target to reduce our Scope 1 and 2 GHG emissions per square foot by 30 percent by 2025 against a 2017 baseline. As of the end of 2023, we have reduced our emissions intensity by 28 percent and believe we are on a path towards achieving this target.

To advance our sustainability ambitions, we have announced emissions reduction efforts that are consistent with the United Nations’ Paris Agreement guidelines and align with an emissions pathway intended to limit global warming to 1.5 degrees Celsius. In 2021, we announced our ambition to be at net-zero emissions by 2050 or sooner, and in 2022, we established a science-aligned interim target to reduce our absolute Scope 1 and 2 emissions by 42 percent by 2030 against a 2021 baseline. In addition, we continue to explore Ross’ carbon reduction pathways for emissions from our own operations and our indirect Scope 3 emissions.

In 2023, we demonstrated our commitment to transparency by submitting the CDP Climate Change Questionnaire, receiving a B on our submission for the fourth consecutive year. We plan to respond to CDP again in 2024, and our response will include our 2023 GHG inventory and additional information about our assessment of our climate-related risks, opportunities, strategies, and management.

Climate-Related Risks

Ross continues to assess climate-related risks and opportunities. As a company founded and headquartered in California, we are conscious of the threat posed by the increased frequency and severity of wildfires. In addition, we have Stores and operations across the United States and in Guam that are susceptible to extreme weather events that have been intensified by climate change. These direct physical risks, along with other physical and transition risks impacting our direct operations and global supply chain, are likely to become more severe as the planet continues to warm.

To further our understanding of the future impacts of climate change on our business, we initiated a qualitative Task Force on Climate-Related Financial Disclosures (TCFD)-aligned climate-related scenario analysis. We are still reviewing results of this analysis and determining how to best integrate into our climate risk assessment process moving forward. Please see our 2024 CDP response for additional details on our response to climate-related risks.

Overview of GHG Emissions

On an annual basis, Ross completes a GHG accounting of our Scope 1 and 2 impacts and certain Scope 3 categories.

Our 2023 GHG inventory was assembled in accordance with industry standards, including guidelines from the Greenhouse Gas Protocol, The Climate Registry, and the U.S. Environmental Protection Agency’s Center for Corporate Climate Leadership. Our reported 2023 GHG Scope 1, 2, and 3 emissions were also verified by a third party to assure accuracy and completeness.

GHG emissions are typically reported in terms of metric tons of carbon dioxide equivalent (MT CO2e). The intensity of our Scope 1 and 2 emissions per total square foot decreased by approximately 28 percent between 2017 and 2023.

We continue to evaluate our Scope 3 emissions sources and have completed a high-level screening of Scope 3 emissions to understand which categories are relevant to our business. Measurement of Scope 3 emissions is an evolving and very complex undertaking that is particularly challenging for retailers like Ross because of the nature of our off-price business model and highly variable and flexible purchasing strategy.

We are actively monitoring and preparing for emerging Scope 3-related disclosure requirements and protocols from multiple states and agencies. We will continue to use a disciplined approach and develop appropriate data collection and analysis processes and controls that are intended to support accurate and reliable Scope 3 measurements and disclosures.

Additional details of our GHG emissions are located in the Appendix of the 2023 Corporate Social Responsibility Report.

Observed GHG Emissions and Target Progress

Energy Details

We endeavor to decrease our energy intensity year over year, which reduces our environmental impact and associated costs.

In 2023, the electricity purchased to operate our facilities represented 86 percent of our total energy consumption, as measured in megawatt hours (MWh) and gigajoules (GJ). Most of that purchased electricity was used to operate our Ross Dress for Less and dd’s DISCOUNTS Stores. Please see the table located in the Appendix of the 2023 Corporate Social Responsibility Report for additional details on our multi-year energy usage.

Energy Efficiency

Because electricity consumption is such a large part of our energy usage and operational emissions, an important aspect of our GHG management strategy addresses electricity use in our buildings. Our investments in lighting, insulation, heating, ventilation, and air conditioning (HVAC), and building energy management systems have enabled us to reduce electricity use. We have teams committed to finding better ways to achieve energy efficiency through improved processes and new technologies. We are also piloting energy audits at select locations to identify new opportunities to optimize energy use. Since 2017, we have decreased the electricity per square foot required to power our Stores, Distribution Facilities, and offices by over 18 percent.

Total Electricity Usage by Location

Supporting Electrical Grid Stability

Ross participates in demand response programs to help support local electrical grids. Through these programs, we voluntarily reduce our energy usage during peak demand times to alleviate strain on the grid and help prevent blackouts or brownouts. We utilize energy management systems that are integrated with our Stores to adjust HVAC systems and reduce electricity usage. By doing so, we are helping keep the lights on for our Customers and supporting the overall health and stability of the local electrical system. Over 700 Ross Stores participated in demand response programs in 2023, and we aim to expand our participation to more locations in the future.

Renewable Energy

While we continue efforts to reduce energy use and improve efficiency in our operations, we acknowledge that a significant portion of the emissions reductions required to meet our Scope 1 and 2 targets must come from transitioning to low-carbon or renewable energy sources. We continue to evaluate strategies and partnerships to pursue both on-site and off-site renewable energy opportunities.

Because the majority of our Stores are leased, options to invest in on-site renewable energy generation are limited. Ross has solar panels installed on the roof of select Stores, and we are engaging with certain landlords to explore the feasibility of installing solar panels at additional locations. We began installing solar parking canopies to generate electricity for our next Distribution Center under construction in Arizona and are evaluating other opportunities for on-site solar at our distribution facilities.

Energy Efficiency: Stores

For many years, we have made investments to decrease the amount of energy used by our climate control and lighting systems, which consume most of the electricity purchased to operate our Stores.

Technologies such as LED lighting and high-efficiency HVAC units have significantly decreased the electricity required to operate these systems. We have LED lighting installed in nearly all of our Stores, and LED lighting will be installed in all new Stores for the foreseeable future. Additionally, we use high-efficiency HVAC units whenever possible by retrofitting existing HVAC equipment or by including them in new Store builds.

To further reduce the energy required to operate climate control and lighting systems, we utilize an advanced building energy management platform that shaves off unnecessary electricity use and enables more precise control over our energy management. This technology allows us to adjust occupancy schedules, lighting levels, and temperatures across our Stores quickly and easily, which provides operational benefits in addition to energy savings. This system also allows for remote diagnosis of HVAC issues to quickly identify and correct inefficiencies, which can prevent unnecessary downtime and costly technician visits to our Stores. We can quickly respond to requests to lower our electricity usage to help electric utilities avoid rolling blackouts during critical periods such as heat waves. By using this platform, we estimate that we have reduced energy usage at our Stores by more than 75 million kilowatt-hours from when we began piloting in 2019 through the end of 2023.

We also prioritize efficiency when designing our new Stores, understanding that investments during the earliest stage of Store development pay off for years to come. In addition to including LED lighting, high-efficiency HVAC equipment, and advanced energy management systems, some of our locations use white roofs to deflect heat and higher-quality insulation than is required by code. These actions result in new Stores that are more energy efficient, lowering our energy usage, environmental impact, and costs. As we continue to add more Stores, efficient new Store design will remain critical for mitigating our environmental impact.

Energy Efficiency: Distribution Centers

Ross’ distribution and warehouse facilities represent a smaller portion of our electricity consumption and, on average, use less energy per square foot to operate than do our Stores.

• We utilize an “air purging” program that uses fresh air to cool our facilities. During the day, the sun heats up our buildings. At night when temperatures drop, we purge the hot air from the building and welcome in fresh, naturally cool air. This allows us to avoid several hours of air conditioning use, saving energy costs. Moreover, the purging program reduces our electricity demand during peak daytime hours, taking pressure off the electrical grid.
• We use highly efficient conveyor systems with variable frequency drives, sensors, and automation that shuts off equipment when not in demand.
• We use LED lighting in many of our supply chain buildings and are in the process of replacing the remaining non-LED lights. For example, we retrofitted our largest Distribution Center in California to use LEDs in 2023, which is expected to reduce total electricity use in the building by more than 10 percent. We also have sensors that shut off lights when areas of a facility are not in use, and many of our facilities have skylights to take advantage of natural light.
• We use battery-powered forklifts and material-handling equipment to move merchandise within many of our distribution facilities. In general, this battery-operated equipment is more energy efficient and has a lower overall cost of ownership compared to fuel-powered equipment.
• Our new Distribution Centers are designed with energy efficiency in mind, with white roofs to reflect sunlight and advanced building energy management systems. Some of our roofs are also “solar ready.”
• We began installing solar parking canopies at our new Distribution Center currently under construction in Arizona. This solar installation will generate clean power for the building while also providing shade for our Associate parking lot.
• We continue to assess the feasibility of installing solar at our existing and future Distribution Facilities.
• We performed energy audits at select Distribution Centers and identified additional opportunities to optimize energy use.

All of these actions help our Distribution Centers reduce air pollution, limit GHG emissions, and achieve cost savings.

Energy Efficiency: Offices, Employee Commuting, and Travel

Our Corporate Headquarters in Dublin, California, achieved Leadership in Energy and Environmental Design (LEED) Gold certification from the U.S. Green Building Council, with features that increase our Associates’ comfort while minimizing our environmental impact.

The sustainability features of our headquarters include energy management equipment such as high-efficiency HVAC equipment, Energy Star appliances, and lighting with motion sensors and daylight controls. Additionally, our interior and exterior lighting both use LEDs.

We enabled lower-emission transportation options by providing on-site electric vehicle charging stations, bicycle storage, and changing facilities. We also located the campus close to public transportation and offer programs to help our Associates pay for public transportation using pre-tax dollars.

We support lower-carbon travel options for the field leadership organization, which supports Stores across the country. One of the key functions of our field leaders is to visit and provide direct guidance to Stores in their area, which means many of these leaders spend a lot of time on the road. To help lower the GHG impact of these visits, Ross maintains a corporate fleet of primarily hybrid vehicles. We estimate that this fleet would have used over 30 percent more fuel in 2023 if it contained only conventional vehicles.

Energy Efficiency: Product Transportation

Although Ross does not own the trucks, trains, and ocean vessels that transport our products, we know that the impact of transporting our products is a significant source of indirect emissions.

We work continuously with our transportation providers to improve shipping efficiency across our distribution network as we grow our business and Store base.

Some of the strategies we deployed in 2023 include:

• Merchandise shipments were consolidated whenever possible to reduce the number of trips to Stores each day.
• We shipped by rail whenever feasible, which is less polluting than standard ground transportation. Approximately 31 percent of the merchandise shipped from our Distribution Centers was sent via rail in 2023.
• Approximately 85 percent of our transportation partners participated in the SmartWay Partnership, a U.S. Environmental Protection Agency program that improves fuel efficiency and reduces air pollution.
• We maximize the capacity of each trailer through floor loading and removing unnecessary packaging, leading to fewer shipments.
• We completed route optimization, which eliminated 1.3 million over-the-road miles from Store deliveries in 2023. We have processes in place to review route optimization opportunities quarterly as we grow.
• We utilized electric yard vehicles at select Distribution Centers to replace vehicles with internal combustion engines and are investigating opportunities to integrate additional electric vehicles into our operations moving forward.
• We worked with international transportation partners on optimal loading of containers shipped on ocean vessels. This lowered the number of containers needed to ship our products from overseas, thus reducing the total number of shipments and emissions.