Emissions and Energy

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

Ross has established a target to reduce our Scope 1 and 2 GHG emissions per square foot by 30 percent by 2025 against a 2017 baseline. As of 2021, we have reduced our emissions intensity by 25 percent, which is ahead of our anticipated pathway to achieving this target. Building on the momentum of our carbon reduction efforts, we have announced our ambition to be at net-zero emissions by 2050 or sooner. In support of this ambition, we are studying Ross’ carbon reduction pathways for emissions from our own operations as well as our Scope 3 emissions. We look forward to sharing more information in the future as we continue this journey.

Ross continues to assess the risks and opportunities presented by climate change. As a Company that was founded and is headquartered in California, we are conscious of the threat posed by the increased prevalence of wildfires. In addition, we have Stores and operations across the United States and Guam and have felt the impact of extreme weather events that have been intensified by climate change, such as floods, heat waves, hurricanes, and winter storms. These direct physical risks, along with other physical and transition risks, are likely to become more severe as the planet continues to warm.

We continued our commitment to transparency by submitting the CDP Climate Change Questionnaire in 2021, receiving a B on our submission. We responded to CDP again in 2022, and our response includes our 2021 GHG inventory, as well as detailed information about our climate-related risks, opportunities, strategies, and management.

GHG Emissions Inventory Details

On an annual basis, Ross completes a GHG accounting of our Scope 1 and 2 impacts and a measurement of certain categories of our Scope 3 impact. We are expanding our measurement capabilities to further understand additional relevant Scope 3 categories.

Our 2021 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 2021 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 square foot decreased approximately 25 percent between our GHG emissions target baseline year of 2017 versus 2021. Additionally, our absolute Scope 1 and 2 GHG emissions decreased approximately 8 percent between 2017 and 2021.

Additional details of our GHG emissions impact are located in the Appendix of the 2021 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 costs. Please see the table located in the Appendix of the 2021 Corporate Social Responsibility Report for additional details on our multi-year energy usage.

In 2021, the purchase of electricity to operate our facilities represented 87 percent of our total energy consumption, as measured in megawatt hours (MWh) and gigajoules (GJ). The great majority of that purchased electricity was used to operate our Ross Dress for Less and dd’s DISCOUNTS Stores.

Because electricity consumption is such a large part of our energy usage and emissions, an important aspect of our GHG management strategy addresses electricity use in our buildings. Our investments in lighting, insulation, heating, ventilation, air conditioning (HVAC), and building energy management systems have enabled us to reduce electricity use. We have teams committed to finding new and better ways to achieve energy efficiency through improved processes and new technologies. We also plan to perform energy audits at select locations to identify new opportunities to optimize energy use.

Ross has solar panels installed on the roof of select Stores. Because a majority of our Stores are leased, however, opportunities to invest in on-site renewable energy generation are limited. We continue to evaluate opportunities to pursue renewable energy in meaningful ways, including considering on-site solar as a part of our future Distribution Centers.

Total Electricity Usage by Location

Energy Efficiency in Stores

For many years, we have made investments to decrease energy use by 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 had LED lighting installed in nearly all of our Stores, and LED lighting will be installed in all of our new Stores for the foreseeable future. In addition, we use high-efficiency HVAC units whenever possible, through retrofitting existing HVAC equipment or including them in new Store builds.

To further reduce the energy required to operate climate control and lighting, we utilize an advanced building energy management platform that enables more precise control over our energy management and shaves off unnecessary electricity use. This technology also allows us to quickly and easily adjust occupancy schedules, lighting levels, and temperatures across our Stores, 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 also quickly respond to requests to lower our electricity usage to help electric utilities avoid rolling blackouts during critical periods like heat waves. Through the use of this platform, we estimate that we have reduced energy usage at our Stores by more than 30 million kilowatt-hours from when we began piloting in 2019 through the end of 2021.

Energy management platform reduced usage at Stores by more than 30 million kilowatt-hours since 2019

We also design our new Stores with efficiency at the center, understanding that investments in 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, we often use thicker, higher-quality insulation than is required by code and white roofs to deflect heat. These actions result in new Stores that are more energy efficient, which lowers our energy usage, environmental impact, and costs. As we continue to add more Stores over the long term, efficient new Store design will be critical for mitigating our environmental impact.

Energy Efficiency in 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.

Highlights of Our Energy Management Program in 2021

• We utilize an “air purging” program that uses natural 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, thereby saving energy costs. What’s more, the purging program reduces our electricity demand during peak daytime hours and therefore reduces pressure on the electricity grid.
• We use highly efficient conveyor systems with variable frequency drives, sensors, and automation that shuts off equipment when not in demand.
• We have LED lighting and sensors that shut off lights when areas of a facility are not in use. Many of our facilities also 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 with its fuel-powered counterparts.
• Our new Distribution Centers are designed with energy efficiency in mind, with white roofs to reflect sunlight and advanced building energy management systems. Our roofs are also “solar ready.”
• We investigated the feasibility of on-site solar at our distribution and warehouse facilities and plan to integrate solar at a future Distribution Center.
• We are also seeking opportunities to perform energy audits to identify additional ways to optimize energy use.

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

Energy Efficiency in Product Transportation

Although Ross does not own its fleet of trucks, 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 Store base.

Some of the strategies we deployed in 2021 include:

• Shipments were consolidated where possible to reduce the number of trips to Stores each day.
• We ship by rail whenever possible, which is less polluting than standard ground transportation. Approximately 33 percent of outbound freight from our Distribution Centers was shipped via rail in 2021.
• Approximately 81 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.
• The capacity of each trailer was maximized through floor-loading and removing unnecessary packaging, leading to fewer shipments.
• We completed route optimization projects, which eliminate 1.1 million over-the-road miles from Store deliveries on an annual basis. We have processes in place to continue to review opportunities to reduce miles and routes on a quarterly basis as we grow.
• We deployed electric yard vehicles at select Distribution Centers to replace vehicles with internal combustion engines.

Energy Efficiency in Travel

Ross has a robust field leadership organization to support Stores located 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 has a corporate fleet of primarily hybrid vehicles. We estimate that we would have used nearly 40 percent more fuel in 2021 if our fleet contained only conventional vehicles.

Like many companies, Ross continued to adjust its business travel policies to prioritize the safety and well-being of our Associates during the ongoing COVID-19 pandemic. As a result, our Scope 3 emissions related to business travel were approximately 58 percent lower in 2021 than in 2019.