Gap Inc. (NYSE: GPS) today issued its first social responsibility report, offering the most comprehensive look ever provided by the company into its ongoing efforts to improve labor standards in the approximately 3,000 garment factories worldwide that produce merchandise for the company's Gap, Old Navy and Banana Republic brands. The report also provides an overview of the company's focus on supporting sustainable, industry-wide change beyond the garment factories that produce its merchandise.

Highlights of the report, which is available online at gapinc.com, include:

• A detailed review of the company's garment manufacturer and factory approval process and ongoing global monitoring program, which was launched in 1996. The company's 90-plus person compliance team conducted approximately 8,500 factory visits in 2003. The team rejected 16 percent of the 653 new garment facilities evaluated in 2003, and revoked prior approvals for 136 factories because of compliance violations.
• Aggregated data for 2003 from eleven geographic regions showing labor and health and safety issues among a base of approximately 3,000 garment factories in 50 countries that were approved to produce merchandise for the company.
• Sample factory rating data from a pilot program designed to quantitatively assess garment factory compliance with Gap Inc. labor and health and safety standards.
• Case studies highlighting independent factory monitoring; the complexities of ensuring a worker's right to freedom of association; and challenges and opportunities that exist in Cambodia's and China's garment industries.
• A discussion of the company's commitment to working collaboratively with multi-stakeholder initiatives such as the Ethical Trading Initiative, Social Accountability International and the Global Alliance; labor unions such as UNITE; and other groups such as socially responsible investment funds to create sustainable, industry-wide solutions and universal standards.

"We believe that garment and other manufacturing workers around the world deserve better than the reality that many unfortunately face," said Gap Inc. CEO and President Paul Pressler. "We recognize and embrace our duty to take a leadership role, and our first social responsibility report discusses in detail our comprehensive efforts and commitments. We are convinced that collaborative, multi-stakeholder engagement is the only way to create sustainable changes for garment workers worldwide. We are working diligently toward that goal."

In preparing the report, Gap Inc. engaged various stakeholders for feedback and input. Five organizations -- Domini Social Investments, the Calvert Group, the As You Sow Foundation, the Center for Reflection, Education and Action, and the Interfaith Center on Corporate Responsibiltity -- comprise the Public Reporting Working Group, formed in late 2002. The group has been helping Gap Inc. explore opportunities for greater transparency and sustainability of the company's ethical sourcing work.

As part of a statement included in the report, the working group said: "This report contains a great deal of information that many companies have not provided publicly. It includes valuable insights from a company that we believe is sincerely struggling with these complex issues."

In addition to a primary focus on improving garment factory conditions, the report also details other aspects of Gap Inc.'s social responsibility efforts. These include community giving and volunteerism, environmental practices, and corporate governance and ethical business practices, as well as policies and programs that support the company's more than 150,000 employees worldwide. Highlights include:

• Community giving and volunteerism: Gap Inc. employees volunteered 22,000 hours in 2003 through company-sponsored programs to clean community parks, restore creek habitats, help kids with art projects, feed the homeless and provide other needed support. Through its Gap Foundation, the company also has donated $60 million to non-profit organizations worldwide over the past five years to help children, youth and families. In addition, the company also makes generous product donations to organizations in need; for example, product donations for 2003 totaled $12 million.
• Supporting the environment: The company has been recognized for its environmentally sustainable building practices at headquarters facilities. In addition, the company continually looks for ways to improve energy conservation across its stores by improving designs, building standards and operations. As a result, stores built in 2003 are roughly 25 percent more energy efficient per square foot than those opened in 2000, and almost 29 percent more efficient than those built in 1990. The company is a member of the U.S. Environmental Protection Agency's Climate Leaders program.
• Corporate governance: From board independence to business ethics, the company strives to ensure that strong corporate governance and compliance standards are a way of doing business. Nine of 13 members of Gap Inc.'s Board of Directors are independent of the company and its management. Complete information about the company's practices is available at gapinc.com.

"How we do business is as important as what we do," Mr. Pressler said. "We've accomplished a lot, as shown in our report, but there's always more we can learn and do. We'll continue working hard to ensure our actions consistently support our values."

Gap Inc. is a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic and Old Navy brand names. Fiscal 2003 sales were $15.9 billion. As of May 1, 2004, Gap Inc. operated 3,016 store locations in the United States, the United Kingdom, Canada, France, Japan and Germany. In the United States, customers also may shop the company's online stores at gap.com, BananaRepublic.com and oldnavy.com.

Gap Inc.

Gap Inc.

Gap Inc. (NYSE: GPS) is a leading global retailer offering clothing, accessories, and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Piperlime, Athleta and Intermix brands. Fiscal year 2012 net sales were $15.7 billion. Gap Inc. products are available for purchase in more than 90 countries worldwide through about 3,100 company-operated stores, over 300 franchise stores and e-commerce sites. For more information, please visit www.gapinc.com.

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