In addition to working with our primary suppliers, we aggressively worked to influence additional supply chain partners to engage with the bluesign® system in 2010. These included trim, synthetic insulation, down insulation, buckles, cording, webbing, and seam tape companies. Next, we will work to bring our thread, label, footwear, and equipment materials partners into the bluesign® system.



bluesign® Savings
While the data gathered from bluesign® technologies' work with textile mills is confidential, we have an agreement that gives us aggregated data from our bluesign® screened suppliers. This allows us to track the impact of the program from year to year. We are extremely proud of the environmental savings we have realized as a result of implementing this system – a testament to our strategy of identifying and addressing our biggest impacts first.

*Our 2011 collections are finalized in 2010 and thus this data can be included in our 2010 report.
** Conversion factors per U.S. DOE and U.S. EPA
**** Average tanker truck volume = 500 gallons

Footwear
While footwear currently represents a small part of our business, the various materials and processes involved in the construction of our shoes and boots bring unique sustainability challenges. We consider a variety of issues including incorporating recycled content, responsibly sourcing renewable materials such as leather, and eliminating potentially harmful chemicals. Our biggest achievement in 2010 was completely eliminating polyvinyl chloride (PVC) in this category. We had used PVC in the straps of our men’s and women’s Slippy flip-flops and in some microinjection labels but were able to substitute rubber for both of these applications. Our footwear meets the following standards:

• • 100% PVC-free.
• • 100% recycled PET.
  • • This means that all of the polyethylene terephthalate (PET) polyester in our footwear is recycled. Our popular Nuptse boots feature 100% recycled PET ripstop material uppers and trim.
• • 100% British Leather Corporation (BLC)-approved leather.
  • • While only a small amount of our footwear is made with leather, leather tanning is a chemical-intensive process demanding strict environmental oversight. All of our leather is audited by the BLC (leather testing experts) against the environmental auditing protocol of the industry-leading Leather Working Group (LWG) and must achieve a silver level or higher.

Global Warming Potential impact during material production and manufacturing

• Plasma Thermal Jacket – 64%
• Hedgehog Shoe – 75%
• Surge Backpack – 85%

Focusing on issues regarding water, energy use and global warming potential, the LCA studies identified six key strategies for achieving the greatest sustainability improvements in our products:

• Decrease product material.
• Select lower impact materials.
• Reduce impacts of dyeing.
• Improve performance of Tier 1 Suppliers.
• Improve retail resource efficiency.
• Minimize washing and drying requirements during consumer use.

Sustainable Materials Landscape
All material choices come with trade-offs. Organic cotton can be water-intensive, readily available bamboo requires a chemically-intensive process to turn it into usable fibers, and using merino wool raises questions about animal welfare. To help our designers make informed choices, we are developing an interactive “Sustainable Materials Landscape” tool for all VF brands to use. It will provide the environmental profile for a wide range of materials used in our industry. Work began in 2010 and will be completed in 2011.

Internal Product Rating Tool and TNF Sustainability Goals
In 2009, we developed our internal Product Rating Tool with binary metrics for bluesign® approved, recycled and organic content. Every product style gets a “yes” or “no” based on whether they meet the thresholds established for each parameter. No credit is given for recycled content, for example, until a 50% threshold is reached. Our Action Sports Product team recently designed cycling shorts with only 49% recycled content – then worked to redesign them until they achieved the 50% threshold. We set the bar for these metrics higher each season.

Outdoor Industry Association Eco Index
No company alone can create groundbreaking change across the industry’s supply chain. That’s why we joined with over 200 companies globally to advance sustainability in the outdoor industry by collaborating to develop the Outdoor Industry Association (OIA) Eco Index. This pioneering environmental assessment tool provides companies with a way to measure and benchmark their products’ environmental footprints and identify areas for improvement. The tool informs product design and sourcing decisions addressing the entire length of the supply chain. The framework is broken into product life cycle phases and covers seven critical impact areas: water, waste, biodiversity, energy use/greenhouse gas emissions, land use intensity, and chemistry/toxicity regarding both people and the environment.

The Eco Index was spearheaded by the OIA Eco Working Group and the European Outdoor Group (EOG) Sustainability Working Group, which TNF EMEA (Europe, Middle East, and Africa) chaired from its inception in 2008 until spring, 2011. The non-profit organization Zero Waste Alliance was also a valuable partner.

The North Face piloted the beta version of the Eco Index in 2010 for three different products (Men’s Paramount Peak Pants, Men’s Short Sleeve Easy Tee, and 100 Glacier 1/4 Zip). Our designers found the framework and content to be robust and helpful in focusing attention on opportunities for improvement they had not considered before.

The Eco Index has caught the eye of others in the apparel industry outside of the outdoor sector, was recently combined with Nike’s Material Assessment Tool to create a comprehensive product sustainability evaluation tool for the apparel industry under the Sustainable Apparel Coalition (SAC). VF joined the SAC in mid-2010, piloting a number of programs across its brands in 2011 to test the SAC’s version of the upgraded tool.

We sort through the remaining items that we are unable to fix and recycle as much as we can. Finally, whatever can’t be recycled is incinerated at a waste-to-energy plant. We believe strongly in responsible disposal and feel good every time we avoid throwing something away.

As our sales grow, the volume of goods that may require repair keeps pace and it is getting harder to keep up. As fabrics become more technical and cutting-edge, it is more difficult to repair them and sometimes requires new technology such as fabric welding tools. We are currently developing a plan to ensure that our approach to repairs meets the latest advances in product materials and construction." - Director of Quality, Rick Griffin

Everest Ice Survey
The effects of a warming climate – shrinking polar ice caps, receding Himalayan glaciers, and thawing permafrost are occurring most dramatically in some of the most inaccessible places on earth. Through time-lapse photography, the Extreme Ice Survey (EIS) is bringing visual evidence of the ongoing retreat of glaciers and ice sheets to a wide audience. The EIS has 28 cameras monitoring 16 glaciers in the world’s most extensive ground-based photographic glacier study. In the spring of 2010, we extended our support of EIS by joining forces with Conrad Anker, one of our global athletes, to take this effort to an iconic landscape by installing five time-lapse cameras that will survey the Khumbu and Nare Glaciers at Mount Everest.

"Our mission is to communicate the immediacy and reality of climate change via an engaging art form. Normally, climate change is presented with charts and statistics and remains fairly abstract for most people. We need to convey the climate change story in a tangible, visual form. There is a tremendous ‘wow’ factor when people see the massive Khumbu glacier churning down a valley. Instead of a static mountainside, time-lapse imagery allows people to see the glacier as a living, breathing organism. By merging art and science, the pictures touch us powerfully. That wakes people up – even climate change skeptics.

Connecting with The North Face and with Conrad Anker has injected tremendous energy into our project. Working with an engaged and enthusiastic partner of Conrad’s stature and having support from the North Face in gaining access to a broad, new audience have been fantastic. We are also grateful for financial support from The North Face for the construction of these specialized cameras and their deployment to these remote locations." - James Balog, award-winning environmental photojournalist and Director of the Extreme Ice Survey

For reporting years 2007 - 2009, The North Face reported U.S. GHG emissions to the EPA Climate Leaders Program. We are reporting U.S. 2010 emissions related to our GHG goal through this GRI Report. We follow the greenhouse gas protocol developed by the World Resources Institute and World Business Council for Sustainable Development (WRI/WBCSD) which includes:

• • Direct emissions (Scope One): This includes on-site energy production, natural gas usage, and fuel for vehicle fleets. We report this for our U.S. operations; additional data is included in the VF CDP report.
• • Indirect emissions (Scope Two): Purchased electricity, steam or heat. This is included in the U.S. operations data above.
• • Other indirect emissions (Scope Three): This category is broad and considered optional by the WRI/WBCSD. We track U.S. business travel and employee commuting for the purposes of determining opportunities for reductions and the emission amounts we offset but do not include these categories in our CDP reporting.

VF Corporation measured and reported its global greenhouse gas emissions – including those of The North Face – for the first time in 2010, covering 2009. VF was commended by the Carbon Disclosure Project (CDP) for its sound approach to climate change reporting and was featured in CDP’s Carbon Disclosure Leadership Index. This index highlights the companies within the S&P 500 Index that have displayed the most professional approach to corporate governance regarding climate change disclosure practices. See VF’s CDP reports for 2009 and 2010 emissions here.

As most of our operations outside of North America are located in facilities with other VF brands, the process of identifying the portion of the VF greenhouse gas emissions attributable to specific brands is complicated. We are developing a methodology to address this and will launch a new global data management tool in 2012. This will help us further standardize our GHG emissions reduction initiatives, data collection and reporting.

The 9.3% reduction in GHG emissions from U.S. operations from 2008 - 2010 is just shy of the interim 10% reduction target that would ensure steady progress toward our 2013 goal of a 25% decrease. A closer look at the data helps us determine where we can focus our efforts to enable us to meet or exceed this goal.

Sponsored Races and Events
We also enable exploration through the many events we design, produce, support and sponsor across the globe. In 2010, we welcomed hundreds of thousands of participants to global events that we owned or sponsored. These ranged from people climbing in New York City’s Central Park to runners entering their first 50-mile race. Our goal is to have these events have a more meaningful and lasting impression for the participant.

We build sustainability into each of these events by striving to create low impact events that “leave no trace.” In 2010, thousands of runners participated in The North Face® Endurance Challenge races at five locations across the United States where we:

• • Organized carpooling support for participants.
• • Promoted reusable water bottle usage; eliminated single-serve plastic water bottles at the Finish Festival; and limited the distribution of disposable cups.
• • Offered participants the opportunity to purchase offset certificates for the carbon emissions of their travel to and from the race through the Race Green program.
• • Provided information about these sustainability features to participants.
• • The 2009 series was named “Best Green Race Series” by Trail Runner magazine.

Our many other global events provide opportunities for athletes to challenge themselves in running races, climbing, mountain biking and snow sports. From ultra-endurance slogs to short distances and kids’ races, participants challenge themselves to push and exceed their personal limits. The global reach of some of our legendary endurance running races includes:

• • Canada: The Canadian Death Race features 17,000 feet of elevation change in 125 km on the way to the finish in Grande Cache, Alberta. It’s a challenging all-or-nothing race - if you finish it under the cut-off time, you’ve won! A 5K kid’s race is also included. 2010 marked the race’s tenth anniversary.
• • China: The North Face® 100 Beijing is the ultimate 100K trail running challenge in China.
• • Chile: The Ultra Maratón de Los Andes in Santiago offers 80K, 21K, 10K and 5K categories at the foot of the Andes Mountains.
• • France: Considered the world’s toughest running race, The Ultra-Trail du Mont-Blanc boasts a grueling 166K course with 9,400 meters of elevation gain through three European countries. In 2010, the race was cancelled three hours after the start due to inclement weather. Organizers created an alternative 100K race – the UTMB Restart.
• • Australia: The North Face® 100 in New South Wales, Australia is staged in the heart of Blue Mountains National Park.

The Conservation Alliance: Funded by the outdoor industry, The Conservation Alliance raises annual contributions from outdoor companies and directs those funds to grassroots, conservation organizations to support their efforts to protect wild places for their habitat and recreation values. The North Face helped to found the Conservation Alliance in 1989 and donates annually. In 2008, we helped to develop and have contributed one million dollars over four years to the Legacy Fund, a campaign to raise an endowment to provide a permanent source of operational funding for the organization.

The European Outdoor Conservation Association (EOCA). The North Face is one of over 60 businesses in the European outdoor industry that supports conservation projects worldwide through this association. Every Association member can nominate up to three projects every year for grants of up to €30,000. The EOCA employs a rigorous screening process to ensure that grants support the most effective conservation organizations. Created in 2006 in the mold of the successful Conservation Alliance in the United States, the EOCA has provided important assistance to over 30 projects including the establishment of an environmental trail in Nepal, clean-up operations on a mountain peak in Kyrgyzstan, the protection of brown bears in northern Spain, replanting of native ‘virgin’ forest in the Czech Republic, and the creation of a trans-boundary hiking trail in Macedonia and Albania.

Khumbu Climbing School. The North Face® Athlete Peter Athans explains the importance of this school in the Himalayan Mountains where so many of our athletes have travelled and volunteered:

"Most of my expeditions have taken place in Nepal or the southern foothills of Everest, so the native climbers I am most familiar with are of Sherpa ethnicity. They are renowned for their remarkable physiology at high altitude - but it is also their psychology of persistence, a perspective tied to their Buddhist practice, that is perhaps the true source of their strength.

The physical landscape of Everest is hallowed ground as the residence of the mother goddess of all humans. The mountain is also sacred and important to the Sherpa because of the sacrifice of human life they have endured in accidents on the mountain assisting foreign and other Nepalese climbers. More than 25% of all fatalities occur to Sherpa mountaineers supporting other climbers' aspirations to reach the rooftop of the world.

The Khumbu Climbing School (KCS) educates Sherpa climbers in proficient and safe techniques for climbing and guiding. I have been involved with the KCS for five years, getting out on a daily basis to teach beginning and advanced students. We teach everything from climbing skills to avalanche preparedness, medical techniques, and effective guiding protocols. The school is in its eighth year and it has been rewarding to see the improvement in our cadre of climbing Sherpas and instructors.

The North Face has provided substantial support for KCS and other community programs where our athletes visit. We need to be in the vanguard of corporations turning the page on old business models, inspiring a new ethic of championing the triple bottom line of profitability, sustainability and responsibility to the environment, humanity, biodiversity and multiculturalism. It is imperative for The North Face to lead. It's our nature."



Donation Metrics 2010 Cash Donations in U.S. Dollars
Americas 762,438 (up 11% from 2009)
Europe 66,957
Asia Pacific 20,850
Total $850,245

Product Donations
We work with charities such as IN Kind in England and Clothes4Souls in the United States that disperse goods to people in need. We also provide product donations in response to disasters. Our Asian office helped earthquake-ravaged areas in western China and the United States office provided tents and other products after the earthquake in Haiti.

2010 Product Donations
• Americas 25,000 pieces
• Europe 5,028 pieces
• Total 30,000+ pieces

A word from Eric Wiseman, CEO, VF Corporation:

"Throughout the 30 or so years I've worked in the apparel industry, I've visited hundreds of factories in dozens of countries. I've seen great factories – and I've seen some pretty bad ones, too. As CEO of VF Corporation, the world's leading supplier of branded apparel, I recognize that our company's reputation is on the line every day in every factory in which our products are produced. That's why we strive to be a leader in global compliance.

We don't simply create initiatives around our values; rather, they are the foundation upon which everything we do is based. We approach our compliance principles the same way – and work to make sure they are embedded into every partnership across our expansive supply chain.

Our current global compliance program stems from 12 principles first established in 1996 and expanded to 16 principles in 2008. These principles represent our commitment to our suppliers and our customers that each piece of apparel produced in our name will be made consistent with internationally recognized labor standards, such as the U.N. Global Compact principles upon which the Global Reporting Initiative (GRI) key performance indicators are based, as well as the International Labor Organization's doctrine for human rights.

At the end of the day, we don't just have to answer to our shareholders and our customers; we also hold ourselves accountable to those in the communities in which we operate on a daily basis. Responsibility is the key to our success and we will continue to maintain the high standards for which we are known – for our customers, investors, employees and partners.”

Eric C. Wiseman
Chairman, President and
Chief Executive Officer, VF Corporation

The North Face and VF believe that every individual has certain basic rights: the right to fair compensation; the right to associate freely and bargain collectively; the right to work free from discrimination and harassment; and the right to a safe, clean workplace. Recognizing that there are different legal and cultural expectations across the globe, VF's factory compliance program sets clear expectations and backs these with a systematic audit program. Here's how VF ensures that its core beliefs are upheld:

• • Terms of Engagement. All suppliers must agree to these before we will work with them. These include our 16 Global Compliance Principles which cover issues from ethical business practices to worker rights and environmental measures.
• • Auditor certification. Factory inspectors are trained and certified to the standards of the International Register of Certificated Auditors (IRCA).
• • Factory audits. Factories are inspected (1-2 days on-site) before we will work with them and classified as follows:
  • o Accepted – Audited yearly (or every 18 months in high confidence cases).
  • o Accepted to be upgraded – Follow-up audits in 3-9 months (depending upon severity of issues found) for progress on action items.
  • o Rejected – Can reapply for re-audit in 3 months; second rejection results in a 12 month ban from consideration.
  
  
  While the focus of our audits is social compliance, we added an environmental component in 2008 that covers management practices relating to energy use, water use, hazardous materials management, worker safety, regulatory compliance, and wastewater discharges. The latter is the most frequent cause for corrective action. On the social side, the most common action issue involves factories, particularly in China, with excessive work hours, minimum wage violations, and the lack of social insurance coverage.
  
  We also want to ensure that factories further back in the supply chain that supply fabric and materials to our garment manufacturers meet our high standards. Material-processing factories have a higher potential for environmental problems and worker health and safety issues than the factories where our products are assembled or cut and sewn. We began expanding our audit program to our Asian fabric suppliers in 2010 and we will bring this initiative to the Americas in 2011. Extending our audit program to our fabric suppliers significantly expands our ability to ensure the social and environmental sustainability of our products.
  
  Better chemical management and the elimination of potentially toxic chemicals during both material processing and product manufacturing protect workers from chemical exposure and ensure safer factories. Our most ambitious and far-reaching initiative to improve factory conditions (and thus worker health and safety) is our campaign to encourage our suppliers to become bluesign® certified. Read about the tremendous success of this program in our product section and watch a video that takes you inside the process HERE.

European Headquarters Move
The North Face® prides itself on having motivated, fulfilled associates and strong retention rates. In mid-2010, we moved most of our European staff from Italy to Switzerland where VF’s other outdoor and action sports brands are located. While we retained customer service personnel in Italy, 90 employees were invited to move. Fifty percent chose not to and left the company. For the people who decided not to join us in Switzerland and the five support people whose positions were made redundant, the company offered a severance linked to salary and seniority. Through a collective dismissal procedure, we are also offering additional financial support for two years.