Our approach to ESG
Our environmental, social and governance (ESG) initiatives are grounded in our heart & soul, the essence of who we are and what binds us as one adopted family. Our heart & soul is made up of our most deeply held purpose, beliefs, values and behaviors. It's all things inspiring, amazing and fun - our building blocks to long-term health and growth.
environmental social governance
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why we exist.
our purpose defines why we exist as a company. it's the reason we wake up every day. the best part is it's uniquely ours no one can claim it or fulfill it the way we can, and we do it for our customers!
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what we believe. | the five below way is a deep belief that our crew members - and everything that makes them who they |
are - fuel our business. as individuals, we are amazing … but collectively, we are unstoppable! | |
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how we behave. | we live our purpose and the five below way through five core values. these values guide us in all decisions and |
actions. beneath each value sits a set of behaviors that reinforce the expectations we hold for ourselves and others. | |
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environmental
Five Below is committed to exploring ways to reduce the amount of carbon we emit and energy we use.
This includes discovering new ways of packaging, offering additional responsible products, as well as operating in our stores, ShipCenters, WowTown (our headquarters) and other offices.
greenhouse gas emissions
In 2022, Five Below conducted a scope 1 and 2 greenhouse gas inventory. We worked with a reputable third-party ESG consultancy to analyze the results and will look to continue this work in line with regulatory requirements in the future.
transportation efficiency
In 2022, we opened a new ShipCenter in Indiana, geographically located to help maximize efficiencies across the network and reduce delivery distance to stores. Additionally, we implemented a new fuel methodology, allowing us to manage our third-party carriers' fuel consumption and emissions, and through Global Logistics optimization and utilization measures, we shipped 268 fewer containers in 2023.
energy efficiency
We use an energy/building management system (EMS/BMS) to monitors consumption across our stores and our two newest ShipCenters in Arizona and Indiana. All appliances within stores are Energy Star rated.
LED lighting
All stores, corporate-owned ShipCenters and WowTown are outfitted with LED lights.
responsible products
As a part of our broad product assortment, we offer textiles produced from recyclable and recycled materials, as well as various Fair Trade- certified products. Additionally, we sell organic products, for example within snacks and personal care items. In 2022 and 2023, we undertook the effort to analyze the exposure to chemicals of concern in our private label products. More information can be found in our SASB disclosure.
reduced packaging
We reengineered our product packaging materials - focusing on charging cables, writing tools and fitness packaging - to minimize waste and reduce transportation needs. In 2023, we reduced the amount of cardboard used by ~420 tons, the equivalent of 7,000 trees saved or 25 acres of rainforest. As a result, we were also able to ship over 90 fewer containers - equivalent to 88 fewer trucks on the highway- further helping reduce energy consumption.
One tool we used is a systematic packaging checklist, divided into three categories: Design, Supply Chain, and Consumer. We use this checklist to challenge ourselves to improve our packaging. Examples of questions on our checklist include:
Design | Supply Chain | Consumer |
Can the package be | Has the shipping | Is the amount of |
container been | ||
smaller? | garbage minimized? | |
maximized? | ||
Has excess packaging | Can the carton be | Is the package |
been removed? | smaller? | reusable? |
Is the package | Can the product be | Is the package |
environmentally | reconfigured for a | |
recyclable? | ||
friendly? | better fit? | |
reusable bags
Since 2020, we have sold over 27 million reusable bags in an effort to reduce waste. In 2023, we sold over 10 million reusable bags.
recycling programs
We have recycling programs at our ShipCenters and in WowTown.
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Everything we do starts and ends with our customers.
We work hard to earn their trust and wow them
amazing experience & staying relevant
We provide our customers with an amazing experience in a unique, dynamic environment with an assortment that meets their needs.
Some highlights include:
• | Expanding the footprint of our new store prototype, featuring a |
Five Beyond section (for products priced above $6), and | |
have successfully converted approximately 700 stores as of | |
2023 - over 50% of our comp base - into this format | |
• | Continuing to roll out Buy Online, Pick Up In Store across our |
crew members*
The number of part-time crew fluctuates depending on seasonal needs. We are in the top quartile of companies in overall crew engagement, according to Gallup. None of our crew belong to a union or are party to any collective bargaining or similar agreement.
~7,000 Full-Time Crew
~15,000 Part-Time Crew
with amazing experiences, products and value at every turn.
We love our crew.
network |
• Modifying crew-assisted checkout to support a fast and easy |
checkout experience as well as address retail shrink |
data privacy & security
We protect the data of our customers and crew with a robust privacy policy and controls using high standards to mitigate risks. Our crew is also trained annually on data privacy management.
~800 | |
benefits | WowTown & |
Offices |
We provide a comprehensive suite of benefits designed to help our crew and their families stay healthy, meet their financial goals, protect their income and help them balance their work and personal lives. We provide competitive pay and significant
~20,200 Stores
~1,000 ShipCenters
*as of 02/03/2024
social
The success and growth of Five Below is the direct result of our employees (whom we call our "crew"), who embrace our purpose, our beliefs and our core values to create an amazing experience for our customers.
Some highlights include:
- Obtaining user data only through lawful and transparent means
- Collecting and processing user data that is limited to the stated purpose
- Implementing leading data protection standards
- Conducting annual training on data privacy management for all crew members
- Conducting phishing tests and education campaigns internally and with key contractors
- Conducting regular risk audits on our data security.
Learn more in our Privacy Policy.
career growth opportunities all within a culture that values
diverse viewpoints and contributions at every level. Our available benefits are listed in our Annual Report.
opportunities
We aim to provide challenging, meaningful and rewarding opportunities for personal and professional growth of all. Additionally, we are committed to keeping our crew safe, maintaining a workplace free from harassment and discrimination, and complying with all applicable laws. For more information on what we expect of our Crew visit our updated Five Below Code of Business Conduct and Ethics.
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social
We hold our vendors to a high standard
because we strive to be an example of good human rights and labor practices throughout our business activities. We take care in the selection of our vendors and require them to meet the standards set forth in our vendor guide.
Our communities play a vital role in our success,
and we feel a strong responsibility to give back. Since 2016, we raised almost $50 million for charities dedicated to kids and their families. Learn more here.
vendor requirements
We require our vendors to, in accordance with all applicable laws, meet the following standards per our vendor guide and standard terms and conditions:
- Treat all workers with dignity & respect
- Provide a safe & clean work environment
- Provide a discrimination, harassment & punishment-free environment
- Where applicable, provide acceptable living conditions
- Respect workers' rights to associate (or not) with groups of their choosing
- Pay workers at least the minimum wage & benefits required
- Follow maximum working hour restrictions
- Prohibit child labor, forced labor & human trafficking
- Prohibit our vendors from using conflict minerals
- Comply with law (including any changes from time to time)
We are certified to participate in Customs-Trade Partnership Against Terrorism ("C-TPAT") to manage the security of our supply chain as part of the effort to protect the United States and our imported products against potential acts of terrorism.
We maintain a vendor/item management system, enabling greater visibility across our supply chain, including factory information for each SKU for which Five Below is Importer of Record.
We require all factories for import vendors to complete and pass a third-party qualification audit, and social compliance and cargo security (C-TPAT)self-assessments for each factory prior to approving use of that facility. Additionally, all import vendors must test and provide documentation to ensure products meet all regulatory requirements.
community giving
In 2023, we raised over $8.5 million to support our communities.
In April 2023, we publicly launched the Five Below Foundation, giving charitable grants and donations to nonprofit organizations across five key pillars:
- Community Enrichment, investing in the communities who have invested in us
- Empowered Inclusion, uniting kids and families of all backgrounds
- Family Support, aiding families in the ways they need it most
- Purposeful Play, increasing accessibility for everyone to Let Go & Have Fun
- Youth Education, helping kids thrive in- and outside the classroom
The Foundation donated over $500,000 to support local partners in 2023.
We're proud to partner with and support these kids- and family- focused nonprofits:
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Our board of directors believes that we must continually nurture our purpose and values to ensure our long-term success.
representation
Our board of directors is diverse in its expertise and experience, with 12 members who have unique perspectives and backgrounds. Four of its members represent ethnic minorities and four of its members identify as female. The board of directors and its Nominating and Corporate Governance Committee will continue to consider diversity in a variety of forms as it evaluates board composition in the future.
political contributions
Five Below has never made any political contributions.
oversight
Five Below amended its Articles of Incorporation and Bylaws in June to transition to annual elections for directors and increase the maximum allowable number of directors to fourteen. The board will be fully declassified by the 2025 Annual Meeting.
We conducted a materiality assessment survey to identify the ESG topics and performance indicators that are most relevant,
and indicative of success based on our industry, footprint, and stakeholders' preferences and guide our ESG strategy. The Nominating and Corporate Governance Committee and Senior Management oversee our sustainability efforts.
Our board and its committees work closely with management and oversee all key strategic, operational, financial and governance matters.
governance
As our overall governance and ESG initiatives emanate from these purpose and values, our board and each of its committees is proactive in oversight. Below is a high- level summary of how the board and its committees oversee our key initiatives. For more information,
please see our investor website at investor.fivebelow.com/ governance.
FULL BOARD | AUDIT | COMPENSATION | NOMINATING & CORPORATE | |
COMMITTEE | COMMITTEE | GOVERNANCE COMMITTEE | ||
Board & Committee Assessment | ✓ | ✓ | ✓ | ✓ |
Board Composition & Nomination Process | ✓ | ✓ | ||
Board Continuing Education | ✓ | ✓ | ||
Board & Executive Succession Planning | ✓ | ✓ | ✓ | |
Corporate Citizenship & Sustainability | ✓ | ✓ | ||
Cybersecurity & Technology Risks | ✓ | ✓ | ||
Enterprise Risk Management | ✓ | ✓ | ||
Ethics & Compliance | ✓ | ✓ | ||
Executive Compensation | ✓ | ✓ | ||
Compensation Risk Management | ✓ | ✓ | ||
Financial Reporting | ✓ | ✓ | ||
Internal Controls & Internal Audit | ✓ | ✓ | ||
Related Party Transactions | ✓ | ✓ | ||
Whistleblower Compliance | ✓ | ✓ | ||
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SASB Disclosure
As part of our efforts to disclose the topics that are most material to our business, Five Below aims to align with the Sustainability Accounting Standards Board (SASB) Multiline and Specialty Retailers and Distributors Standard.
All data referenced in this report is from FY 2023.
We plan to update these figures on an annual basis.
Topic | Metrics | Five Below Response | |
Energy | 1. | Total energy consumed | 1. In 2022, Five Below worked with a third-party consultant to calculate our energy |
Management | 2. | Percentage grid electricity | consumption. We continue to build upon this work and will look to disclose data |
in Retail | 3. | Percentage renewable | in line with regulatory requirements. |
& Distribution | 2. 100% grid electricity | ||
3. No renewable energy consumption | |||
Data Security | Description of approach to | We protect the data of our customers and crew with a robust privacy policy and | |
identifying and addressing | controls using high standards to mitigate risks under the supervision of our Chief | ||
data security risks | Information Security Officer. | ||
(1) Number of data breaches, | Our program includes: | ||
• Obtaining user data only through lawful and transparent means | |||
(2) percentage involving | |||
• Collecting and processing user data that is limited to the stated purpose | |||
personally identifiable | |||
• Implementing leading data protection standards | |||
information (PII), (3) number | |||
• Conducting annual training on data privacy management for all crew | |||
of customers affected | |||
members | |||
• Conducting regular phishing tests and education campaigns internally and | |||
with key contractors | |||
• Conducting regular risk audits on our data security | |||
Learn more at https://www.fivebelow.com/privacy | |||
Any material data breaches would be disclosed in our Forms 8-K on our investor | |||
relations website. We experienced no material data breaches in 2023. | |||
Labor Practices | (1) Average hourly wage and (2) | All Five Below retail operations are located in the US and subject to federal and state | |
percentage of in-store | minimum wage laws. All Five Below employees earn at or above the applicable | ||
employees earning minimum | minimum wage for their location. | ||
wage, by region | |||
(1) Voluntary and (2) involuntary | We track voluntary and involuntary turnover numbers internally, but do not currently | ||
turnover rate for in-store | disclose these statistics. | ||
employees | |||
Total amount of monetary | All legal proceedings would be disclosed in the appropriate filing on our website; in | ||
losses as a result of | 2023, we experienced no legal proceedings due to labor law violations. | ||
legal proceedings associated | |||
with labor law violations | |||
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SASB Disclosure
As part of our efforts to disclose the topics that are most material to our business, Five Below aims to align with the Sustainability Accounting Standards Board (SASB) Multiline and Specialty Retailers and Distributors Standard.
All data referenced in this report is from FY 2023.
We plan to update these figures on an annual basis.
Topic | Metrics | Five Below Response | |
Workforce | Percentage of gender and | Five Below does not currently disclose this data. However, we believe Five Below is | |
Diversity & | racial/ethnic group | strongest when our teams reflect the diversity of the communities we serve. We | |
Inclusion | representation for | continue to monitor workforce diversity internally and will consider disclosing | |
(1) management and | metrics in line with regulatory requirements. | ||
(2) all other employees | |||
Total amount of monetary | All material legal proceedings are disclosed in the appropriate filing on | ||
losses as a result of legal | our website. In 2023, we did not experience any material employee discrimination- | ||
proceedings associated with | based lawsuits. | ||
employment discrimination | |||
Product Sourcing, | 1. | Revenue from products | 1. We currently do not certify our products to any third-party standards. |
Packaging, | third-party certified | 2. In 2022, we undertook the effort to analyze the exposure to chemicals of | |
& Marketing | to environmental and/or | concern in our private label products. We repeated this work in 2023 with an | |
social sustainability | expanded portfolio of products. | ||
standards | |||
• About 4% of SKUs were identified as critical products due to their high | |||
2. | Discussion of processes to | ||
sales volume and potential for chemicals exposure. These SKUs range | |||
assess and manage risks | |||
across our departments and are prioritized for increased | |||
and/or hazards associated | |||
oversight. | |||
with chemicals in products | |||
• The majority of our surveyed products were found to be low-moderate | |||
3. | Discussion of strategies to | ||
risk. We follow all national and regional legislation around restricted | |||
reduce the environmental | |||
substances and maintain the appropriate testing protocols for our | |||
impact of packaging | |||
products. | |||
• We are currently assessing next steps to increase our chemical | |||
management and oversight of third-party products, including developing | |||
a chemical management plan or Chemicals of Concern Policy. | |||
3. We reengineered our product packaging materials to minimize waste and | |||
reduce transportation needs. In 2023, we reduced the amount of cardboard | |||
used by ~420 tons, the equivalent of 7,000 trees saved or 25 acres of | |||
rainforest. As a result, we were also able to ship nearly 94 fewer containers. | |||
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Five Below Inc. published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 17:36:05 UTC.