067HN_AAP-ESG-2021-Report-M

MATERIALITY ASSESSMENT

Our consultant also conducted live interviews with internal and external stakeholders to gain deeper insight into their views about ESG at Advance. We considered our complete survey results, aggregate responses from our investor and customer stakeholder categories and feedback from the live interviews in selecting 15 ESG topics to further evaluate for the potential to add value to our business.

For each topic within this more targeted group, our internal leaders for the topical area, along with leaders from our finance team, evaluated the potential for focus on the topic to mitigate risk or cost exposure, lead to financial savings or efficiencies or provide a social or reputational benefit that could fuel differentiation. A cross-functional team including our chief executive officer, chief financial officer and our most senior leaders in each of the environmental, social and governance areas then reviewed the results of those evaluations and, together with our consultant, identified the five ESG topics that we believe provide the greatest value to our business. These topics are:

ENVIRONMENTAL

Hazardous Substances & Product End-of-Life

We sell an incredibly broad range of products, and some of the products we sell contain oil, paint or other substances that call for special care. Our accountability for how we store and handle those products, including how we handle product components brought back to us at the end of the product’s lifecycle, impacts the planet and our business.

SOCIAL

Employee Safety

Our stakeholders have validated our perception that the health, wellbeing and safety of our team members is of paramount importance. We believe that building and sustaining a safety culture not only provides protection for our team, but also directly increases our productivity and the efficiency of our operations.

Talent

The success of our business depends on our relationships with our customers and ability to exceptionally serve their needs. Attracting, retaining and developing the people best positioned to help us say “yes” to our customers is a key component of our strategy.

Diversity, Equity & Inclusion

An engaged, collaborative workforce in which all team members bring the entirety of their authentic selves to work every day and can leverage variation in background, thought and experience into better solutions for our customers can help us provide a differentiated value proposition for team members and facilitates achievement of our long-term business goals.

GOVERNANCE

Cybersecurity

In addition to selling products in stores, we conduct a significant amount of business online and use many network-connected tools in our operations. The integrity of our technological infrastructure and our ability to mitigate threats to systems that power our operations is a source of significant value to our business.

ABOUT

PEOPLE

PLANET

COMMUNITY

GOVERNANCE

2021 ADVANCE AUTO PARTS CORPORATE SUSTAINABILITY AND SOCIAL REPORT | 58

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