Anvil CSR reposrt 2013

2012 INTERIM CORPORATE SOCIAL RESPONSIBILITY REPORT

GROWING INTO THE FUTURE.

2012 INTERIM CORPORATE SOCIAL RESPONSIBILITY REPORT 1

2 About this Report 2 Organization Set-Up 2 Recent Changes: Gildan Acquisition 3 CEO Letter 5 Highlights 6 Recognition 7 Goals and Progress 8 Anvil Operations

SOCIAL 10 Introduction 10 Guiding Principles 11 Work Force 12 Grievance Mechanisms 12 Labor Unions 12 Health and Safety 12 Training and Development 13 Anvil Sustainable Manufacturing (ASM) 13 Injury and Severity Rates 14 Social Compliance 15 Community Investment

PRODUCT 18 Introduction 18 Eco Collection Highlights 21 Organic Cotton Support 22 Life Cycle Assessments 24 Product Safety

ENVIRONMENT 26 Introduction26 Water27 Water Footprint27 Indirect Energy28 GHG Emissions28 Waste28 Direct Energy

TABLE OF CONTENTS


ABOUT THIS REPORT Anvil’s 2012 Interim Corporate Social Responsibility (CSR) Report presents highlights and updates on specific areas of CSR at Anvil for the 2011 fiscal year (February 1, 2010-January 31, 2011), as well as information pertaining to our progression towards previous stated goals and information of interest for our various stakeholders.

Transparency continues to be an important part of our reporting strategy, and Anvil’s three-pronged approach to corporate responsibility represents the main segments that have been examined: Environmental, Social and Product Responsibility.

Disclosed in this report is information for Anvil’s wholly-owned facilities in Central America, as well as its headquarters in New York City, distribution center in South Carolina, dye facility in North Carolina and European sales office in Germany. This interim report should be read in conjunction with our complete 2011 CSR Report, covering fiscal year 2010 and prepared following the Global Reporting Initiative (GRI), available on our website at anvilknitwearcsr.com.

Moving forward, Anvil’s data will be added to Gildan’s corporate citizenship reporting system for Gildan’s 2013 fiscal year.

Organizational Set-Up Established in 1899, Anvil Knitwear Inc. is a vertically-integrated apparel and sportswear manufacturer that primarily serves the Printwear and Private Label markets.

Anvil offers 66 styles of activewear and accessory products, including t-shirts, caps and towels in a variety of fibers such as combed ring spun cotton, organic cotton (certified under USDA National Organic Program standards) and recycled P.E.T. polyester blends. Anvil is one of the

largest purchasers of US grown organic cotton and has been consecutively ranked as a Top Ten Global Brand Using Organic Cotton by the Textile Exchange since 2009.

Anvil manufactures approximately 80% of its products in wholly-owned subsidiary facilities, located in Honduras and Nicaragua, although from time to time we source products from subcontractor facilities.

At the end of fiscal year 2011, Anvil employed over 4,200 employees in the United States, Central America and Germany.

Recent Changes – Acquisition by Gildan Activewear Inc. In May 2012, Anvil was acquired by Gildan Activewear Inc., a leading Canadian apparel company in the screen print channel. As a new member of the Gildan family, we are excited about the future. Gildan’s manufacturing expertise, financial strength and commitment to servicing the industry will all be leveraged to grow the Anvil® brand. Gildan’s efficient energy, wastewater treatment and waste reduction programs, as well as their commitment to vertical integration, wherein they own most of the facilities where their products are made, will all contribute to providing customers with confidence in the product they purchase. You can be assured that you will receive consistently high quality products, manufactured in safe and ethical work environments.


CEO LETTER

“Responsibility is an evolution; it’s a journey that never ends. As a brand with roots dating back to 1899, responsibility is ingrained in our DNA. That’s how we’ve sustained ourselves over our 100+ years of conducting business.”


A milestone in Anvil’s evolution was in 2007, when we came together as a company and asked ourselves what issues were going to be important for the rapidly changing world that we live in and what role we would play as a responsible apparel manufacturer. As we formalized our mission, vision, values and policies, a three-pillar foundation of environmental, social and product responsibility stemmed forward, grounding all business practices and decisions.

During this time, we created our first organic cotton t-shirt under the AnvilOrganic™ brand and we’ve now become a leader in the organic cotton segment. We are proud of our strong relationship with the USA organic cotton farming community and remain committed to support their efforts, especially with uncertainties in weather patterns as apparent in the record-breaking drought of 2011.

Read on to learn about our continued efforts to minimize the impacts we have on natural resources - such as decreasing the amount of water used in dyeing our t-shirts by 15% over the last three years, and how we recycled 67% of our waste by reusing packaging materials to and from our facilities. You’ll also discover how we are collaborating with school systems and local organizations in the USA and Central America to inspire students to actively engage in environmental preservation efforts.

I’m also excited to announce the next chapter of Anvil. In May 2012, we were acquired by one of the industry’s leading companies, Gildan Activewear. Anvil will be integrating Gildan’s Genuine Stewardship programs and together we will cultivate innovative industry-leading solutions that will reduce the impacts of our business operations and bolster new ideas for responsibility. We stand committed to develop solutions that strengthen our environmental conservation programs, to advance community development efforts in the areas in which we live and work and continue to deliver affordable quality products made with integrity and care.

Our continued efforts to meet the needs of customers and stakeholders seeking to support environmental and social responsibility practices through our products helps guide our innovation process and inspires our active social conscience. All of our decisions are made with our stakeholders in mind and we owe our success to them for their full support over the years. To our employees, customers, suppliers, shareholders and the communities where we operate- thank you for believing in the Anvil brand. We are fully embraced to grow with you into the future.

Sincerely,

Anthony CorsanoCEO Anvil Knitwear


HIGHLIGHTSContinued Support for USA Organic Cotton FarmersMembers from the Texas Organic Cotton Marketing Cooperative (TOCMC) joined us at the annual Farm-Aid concert in Kansas City to support American family farmers. We also met up with TOCMC at Farm Field day in Lubbock, TX during the record-breaking drought of 2011, where we reiterated our commitment to using USA organic cotton.Decreased Overall Waste

We recycled 67% of overall waste at our facilities due to extensive recycling programs. Even our cardboard yarn cones are sent to the biomass boiler and turned into renewable energy at our textile plant.

Reduced Water in ManufacturingAnvil’s major textile facility decreased water consumption per pound of fabric by 15% compared to 2009 by improving steps in the dyeing and bleaching processes.

15% 67%


WRAP CertifiedAll three of Anvil’s Central American facilities are certified and audited by Worldwide Responsible Accredited Production (WRAP), an independent non-profit organization dedicated to the promotion and certification of lawful, humane and ethical manufacturing.

HIGHLIGHTS• Disney®: Most Sustainable Vendor –

North America, 2011

• Adidas®: Vendor of the Year Award for Apparel Suppliers the SEA category (Social and Environmental Affairs, 2011)

• Apparel Magazine: Sustainability All-Star Award, 2011

Anvil was one of five companies chosen for demonstrating commitment to making their businesses more sustainable in specific ways as part of an overall strategy

• Best First Time Report at Ceres and Association for Chartered Certified Accountants (ACCA) North American Awards, 2011

The Ceres-ACCA North American Awards for Sustainability Reporting aims to recognize and encourage exemplary reporting on sustainability performance by corporations and other organizations across the United States, Canada, and Mexico

• International Academy of the Visual Arts: Silver W3 awards for “A Message from Earth” in the Environmental Awareness and Green category 2011

RECOGNITION


2011 SOCIAL GOALS PROGRESSAdopt Anvil Sustainable Manufacturing (ASM) throughout the organization by the end of 2013

We began ASM training internally in 2010 and continued training into 2011. As of September 2012, 95% of Anvil’s employees at our textile facility are ASM trained and 17% of our employees at both cut and sew facilities are ASM trained.

Provide supplier training to encourage compliance with ASM requirements

Since we have not yet completed internal training with our employees, we did not move on to training our suppliers.

Implement more programs that support the advancement of women and ensure diversity

In 2011, we completed the Calvert Women’s Principle self-assessment to identify areas of strength and opportunities for additional reinforcement of our policies and practices to advance and support female workers. The results of the self-assessment highlighted certain strengths at Anvil (such as Employment and Compensation, Health, Safety & Freedom from Violence and Civic and Community Engagement), as well as certain opportunities for additional investment (such as Management & Governance and Transparency & Accountability).

Commit to providing a healthy work environment and continually improve the work experience of all of our employees

All three of our Central American facilities are WRAP certified and are audited on a regular basis, by Anvil’s compliance manager and externally through third-party audits, to ensure the certification of lawful, humane and ethical manufacturing practices. We continue to work with local health departments, doctors, pharmaceutical companies and medical schools to organize annual on-site health fairs at each of our facilities in Central America. View Social section page 10

Ensure a workplace free of discrimination and workplace harassment, and ensure ethical business conduct in all matters

We are continually committed to the values and principles established in our Code of Ethics, which encompasses anti-discrimination and anti-harassment clauses and summarizes the values and principles that guide our actions and reinforce Anvil’s commitment to an ethical way of doing business.

Achieve and retain the highest standards in social certifications All three of our Central American facilities are WRAP certified and audited by customers on a regular basis. View Social Compliance section page 14

Assess, address and report on ecological impacts of supply chain

Throughout the year, we conducted two life cycle assessments to evaluate the production, use and disposal of Anvil products. We also conducted our first water footprint assessment to learn about the impact of water consumption in our sup-ply chain. View Life Cycle Assessments page 22

Continue to use scorecard to grade supplier compliance and ensure continual improvement

All our suppliers are evaluated on a scorecard, the results of which are reported to executive management. Any supplier which does not meet our requirements or does not work to improve the conditions revealed in an audit, by working on a corrective action plan, is eliminated from Anvil’s supply chain. View Social Compliance section page 14

Seek social and environmental certifications for our major subcontractors and finished goods suppliers

We have achieved great success in encouraging our contractors to obtain social certifications. In 2011, five out of six manufacturing contractors obtained the WRAP certification.

Assess and measure the return on investment (ROI) of sustainability measures

There are several projects within our facilities where we are able to measure the ROI for meeting sustainability reductions, such as decreases in energy, air-compression and fuel consumption. View Energy section page 28

Expand Anvil’s social investment projects focused on housing, education and welfare

In 2011, Anvil’s Nicaraguan cut and sew facility renewed the housing project agreement for the construction of three houses in the municipality of Masatepe; this project was complete in 2012. Anvil continued environmental education programs in both the US and Central America throughout the course of the year. View Community Investment section page 15

Continue to protect human rights and ethical practices in the workplace and in our supply chain

Anvil’s Code of Conduct, Environmental and Social Responsibility Principles and Ethical Production and Sourcing Principles continue to guide our actions to protect human rights and ethical business practices.

GOALS AND PROGRESSThe below tables provide a brief update on the progress towards our goals, as stated in last year’s CSR report. In the context of the acquisition of Anvil by Gildan, a thorough assessment of our environmental, social and product targets and programs are being conducted in order to identify potential synergies with Gildan’s existing goals and programs, and ultimately to avoid duplication.


2011 PRODUCT GOALS PROGRESSContinue to grow our market share of the organic and transitional cotton market and build a scalable supply chain through collaborative efforts and innovation

We continue to work closely with members of the Texas Organic Cotton Marketing Cooperative (TOCMC) and support both organic and farmers transitioning to organic methods by providing them with a set market to sell their fiber and a premium to the price of conventionally grown cotton.

Improve the profile of the materials used for all Anvil products, and work to eliminate the release of harmful substances, in all stages of production

70% of Anvil products were certified under Oeko-Tex® Standard 100 in 2011. This percentage increased to 80% in 2012.

Continue to collect and utilize vendor derived data and encourage suppliers to participate in the process

In 2011, we partnered with several vendors to develop a new LCA for the American Tee Collection, featuring a new cut and sew facility. We also introduced a comparative LCA between the United States and European Union for three Anvil styles. View Life Cycle Assessments page 22

Continue to use and develop innovative ways to educate distributors, private label customers, vendors, employees and consumers on the benefits and value of making responsible choices

Our TrackMyT® site continues to educate customers and consumers on the lifecycle of our t-shirts and the benefits of making responsible choices. In 2011, we added new farmer profiles to the organic cotton module on TrackMyT® and created a new version of TrackMyT® for the American Tee Collection, which included a new series of LCA and introduced a new cut and sew facility in our value chain.

2011 ENVIRONMENT GOALS PROGRESSReduce Energy Per Unit Produced by 20% by 2020, based on 2007-2008 levels

Although we have seen an increase in the percentage of dyed fabric produced which uses more energy compared to bleaching fabric for whites, there was a 2% decrease in the total energy used to produce a pound of finished fabric in 2011 compared to 2007-2008.

Reduce Water Per Unit Produced by 20% by 2020, based on 2007-2008 levels

In 2011, we were able to make reductions in water consumption per pound of finished fabric produced by 15% at our dye house. View Water section page 26

Achieve Zero Landfill Waste Stream by fiscal 2020 We continued to increase the percentage of recycling for our overall waste by 67% in 2011 due to extensive recycling programs in all facilities. We aspire to meet this goal in the coming years. View Waste section page 28

Continue to review our organizational emissions on an annual basis and continue with improvements to the data collection process

We continued to calculate our carbon footprint to track our yearly emissions progress. Since the 2011 environmental data has been integrated into Gildan’s corporate citizenship database, we were able, for the first time, to electronically collect information, which ensures a greater level of accuracy of numbers. View GHG section page 28

North America Central America

ANVIL OPERATIONS

GermanyNew York

North CarolinaSouth Carolina

Nicaragua

Honduras

Cut & Sew FacilityDye FacilityEU Sales

Corporate HeadquartersDistribution CenterTextile Facility

Europe


Texas Organic Cotton Marketing Cooperative (TOCMC) member Eddie Bingham stands in front of an organic cotton bale in Lubbock, Texas. His son Cliff Bingham is also a member of TOCMC.


SOCIALAnvil’s guiding Code of Conduct and Environmental and Social Responsibility Principles, as well as engagement with outside independent organizations like WRAP, which aims at maintaining respectful, honest and safe workplaces for our employees, ensures that our products are manufactured under conditions that reflect our values and standards. Anvil also stands committed to acting as responsible neighbors in the areas in which we live and work.

Guiding Principles Anvil’s Environmental & Social Responsibility Principles, which were adopted in 2007, set forth our management approach to responsibility and outline specific actions we will take as a company in order to manage our performance and achieve our goals. The elements contained in the Anvil Responsible Production and Ethical Sourcing Principles (Production Principles) outline in practical terms the standards we require of our business partners. If a facility is found to be in violation of the Production Principles, the partner will be requested to take corrective action. Our Code of Conduct applies to the entire supply chain and states specific provisions to guide our workforce on how to behave ethically and safely in all areas of business.

We also adhere to the International Labour Organization’s Conventions and Recommendations, which promote rights at work, encourage decent employment opportunities and enhance social protections.

http://www.anvilknitwearcsr.com/report/wp-content/uploads/2010/05/Anvil-Code-of-Ethics-8_22_07-final.pdf

http://www.anvilknitwearcsr.com/report/wp-content/uploads/2010/08/Environmental-Social-Responsibility-Principles.pdf

http://www.anvilknitwearcsr.com/report/wp-content/uploads/2010/08/Environmental-Social-Responsibility-Principles.pdf

http://www.anvilknitwearcsr.com/report/wp-content/uploads/2010/07/Responsible-Production-Principles.pdf

http://www.anvilknitwearcsr.com/report/wp-content/uploads/2010/07/Responsible-Production-Principles.pdf


Workforce We owe our success to the individuals working behind our t-shirts and therefore, we are committed to implementing the best work practices to retain talent in an increasingly competitive industry. Our workforce grew by 2% in 2011 to over 4,200 employees and we continued to experience an overall declining trend in our turnover rate for all operations, dropping by 4% during the year. We attribute the employee turnover reduction to economic stability at our facilities compared to previous years during the worldwide recession.

SOCIAL

Anvil employees at our WRAP certified textile facility in Honduras.


Grievance MechanismsEach Anvil-owned manufacturing plant has adopted a formal grievance process. According to our internal policies and our Code of Conduct, the grievance procedure ensures an impartial hearing without fear of retaliation. Each manufacturing plant operates under a published “open door” policy where employees are encouraged to propose suggestions and/or voice complaints. In addition, each unionized facility provides employees the option of union representation during the grievance process. Finally, as part of our audits of subcontractors and finished goods suppliers, we evaluate that there is an effective grievance process in place for their employees.

Health Fairs Anvil continues to work with local health departments, doctors, pharmaceutical companies and medical schools to organize annual on-site health fairs at each of our three facilities in Central America, during which our employees and members of their family receive free medical and dental care as well as screenings for diabetes, heart disease, HIV/AIDS, cancer and other diseases and conditions. Weight loss, smoking cessation and psychological counseling sessions are also offered.

In 2011, approximately 1,500 employees in Honduras and 600 employees in Nicaragua participated in our health fairs.

Labor UnionsWe fully respect workers’ right to freedom of association. In 2011, 77% of our total workforce was unionized and operated under a collective bargaining agreement. We regularly met with union representatives and believe we have fulfilled all of our obligations under such agreements.

Health and Safety Occupational health and safety remains a top priority at Anvil. Our Health and Safety program covers, among other things, health and safety issues such as personal protective equipment and access to first aid kits, medical and educational benefits and services and the participation of worker representatives in health and safety committees.

In fact, at our offshore plants, there are various health and safety committees that are actively involved in fire prevention, safety training and other emergency trainings year round. Over

1,100 employees at our Central America facilities received approximately 9,000 training hours for health and safety measurements in 2011. Employees trained in health and safety varies depending upon job duty and involvement with certain tasks.

At our North Carolina dye house, the safety committee, comprised of five employees, two of whom are managers, meets three times a year to review state Occupational Safety and Health Administration (OSHA) standards and ensure the facility is in compliance. At our South Carolina distribution facility, the committee, comprised of seven employees, two of whom are managers, meets regularly to discuss general safety, especially as it relates to forklift operations. Both of these committees operate at the facility level in order to directly address their respective safety issues.

Training and DevelopmentOverall training hours at our Central American facilities increased by 35% between 2010 and 2011, primarily due to the increase in Anvil Sustainable Manufacturing (ASM) training hours. Included in the total hours were training on Code of Conduct, environmental health and safety training, leadership skills, quality, on-site job training and ASM.

10% Safety Handling of Chemical Substances

13% Safety for Lift Truck Operators

15%Fire Evacuation Training

15%Emergency Rescue and Evacuation

HEALTH AND SAFETY TRAINING IN CENTRAL AMERICA FACILITIES

TOTAL NUMBER OF EMPLOYEES PER REGION

United States

Central America

Germany

7%Safety in Maintenance Operations

8%Ergonomics

22%First Aid training

10%General Safety

OVERALL EMPLOYEE TRAINING HOURS INCREASE

0

10

20

30

40

50

60

20112010

54,0

00

40,0

00

2011201020092008

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3200

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50

2011201020092008

2011201020092008

3,900

4,00

0

20220

20230

2010 2011


What is ASM? • Combines principles of sustainability (resource/input reductions)

with lean manufacturing (waste reduction and team sewing)• Less rework due to faster feedback and greater sewing

accountability• Enhanced team sewing process improve lead time• Builds leadership and team dynamics among employees

Anvil Sustainable Manufacturing (ASM)ASM was created as a comprehensive company-wide initiative to ensure responsible manufacturing and reduce resource consumption to hedge against rising costs and potential future resource scarcity. Our employees have been trained with innovative leadership skills and procedures to empower them to make better working decisions, respect one another, reduce energy, maximize raw material utilization and optimize production lines and equipment. We believe that these initiatives are investments which yield operational improvements and protect Anvil’s brand and private label customers.

In 2011, 95% of the employees at Anvil’s textile facility and 17% of the employees at both Anvil cut and sew facilities were ASM trained with a combined total of 32,000 training hours.

Injury and Severity Rates: In 2011, the total number of reported injuries increased compared to 2010 for our all Anvil facilities.

In particular, Anvil’s Honduras cut and sew facility experienced an increase in minor injuries, which lead to a significant increase in the overall injury rate in 2011. Also, our distribution center experienced eight injuries involving lost days in 2011 compared to no reportable injuries in 2010, which lead to an overall severity rate increase.

SEVERITY RATE

WORK RELATED INJURY RATE

16% Health & Safety

60% ASM

7% Code of Conduct

3% Leadership Management

12% Quality

2% Other

BREAKDOWN OF TRAINING HOURS IN 2011

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Data is based on Occupational Safety and Health Administration (OSHA) calculations. Factor 200,000 is derived from 50 working weeks at 40 hours per 100 employees. Injury Rate: total amount of accidents/total work hours x 200,000; Severity Rate: total lost days/total work hours x 200,000.

Severity Rates:2010: 7.62 2011: 8.92

4.08

6.0

4.85

1.86

3.18

4.67 4.73

3.88

Q4 2011

Q4 2011

Q3 2011

Q3 2011

Q2 2011

Q2 2011

Q1 2011

Q1 2011

2010

2010

0.54

0.29

0.370.43 0.410.44

0.56

0.37

Injury Rates:2010: 1.86 2011: 2.46Under ASM, work stations are effectively

maintained among our employees. Employees carefully spread fabric in preparation for cutting it into pieces to be sewn into Anvil t-shirts.


AUDITS CONDUCTED BY ANVIL COMPLIANCE MANAGER

TypeTotal Audits Conducted

Total Non-conformances

Low Risk

Medium Risk

High Risk

Major Material Suppliers 7 31 14 17 0Manufacturing Contractors 16 37 34 3 0Recyclers 4 23 11 12 0Anvil Owned Facilities 9 50 50 0 0Total 36 141 109 32 0

Social Compliance Every complete audit conducted by Anvil, at Anvil-owned facilities and at its contractors and suppliers’ facilities, validates compliance with regards to the principles outlined in Anvil’s Production Principles: laws and regulations, forced labor, child labor, freedom of association, non-discrimination, disciplinary, compensation and benefits, working hours, health and safety, environment, as well as customs with CTPAT. Our Production Principles are not meant in any way to place an undue burden on our business partners. Rather, in sharing our Production Principles, we aim to reaffirm and make more explicit those ethical norms already mainstreamed in the global business environment. If a facility is found to be in violation, the partner will be requested to take corrective action. Furthermore, Anvil’s compliance manager follows-up to verify if the agreed remediation plan was put into place.

During 2011, nine Anvil audits were conducted by our compliance manager at our three Central American manufacturing facilities. All three of our owned facilities are also audited and certified by Worldwide Responsible Accredited Production (WRAP), dedicated to the certification of lawful, humane and ethical manufacturing throughout the world.

Our internal compliance manager audited five material suppliers, six manufacturing contractors and three recyclers, such as collectors of fabric, electronics and other waste, for a total of 36 audits for the year. In total, there were 141 non-conformances found from the 36 audits conducted. However there were no high-risk non-conformances at Anvil facilities and manufacturing contractors and suppliers. The majority of suppliers and contractors’ audits comply with environmental health and safety standards and we no longer work with those who scored high-risk in the past. No contractors were found for

non-compliance related issues to Anvil’s requirements, therefore none were dropped in 2011. The greatest majorities of internal non-conformances at Anvil facilities were from health & safety issues. The remaining non-conformances were related to law and regulations, environment, working hours and disciplinary. In all cases of non-compliance, remediation plans were developed and executed. For example, details from the corrective action plan to improve health and safety issues included adding more fire extinguishers, increasing internal safety trainings and adding safety brigades.

84% Health & Safety

8% Law and Regulations

4% Environment

2% Working Hours

2% Disciplinary

2011 ANVIL-OWNED FACILITIES NON-CONFORMANCES BY CATEGORY

75% Contractors and Suppliers

25% Anvil

INTERNAL SOCIAL COMPLIANCE: ANVIL FACILITIES VS. CONTRACTORS

50% WRAP

50% Customers

THIRD-PARTY AUDITS AT ANVIL FACILITIES

There were a total of three WRAP and three private label audits conducted in 2011.


COMMUNITY INVESTMENTOur community investment strategy has prioritized projects which are aligned with our mission and helping local communities in which we live and work to address sustainability education and environmental preservation projects. While being in line with our core business, we see the greatest potential for impact in these focus areas and believe that working with educational systems and supporting an environmental agenda will better prepare a future generation for the changing world that they will inherit. You will find below a few examples of community initiatives that Anvil has contributed to in 2011.

Encouraging Environmental Education in HondurasIn 2011, Anvil formed an alliance with the Honduran Ministry of Youth and the Inter-institutional Committee of Environmental Sciences, where we sponsored an environmental forum with several Honduran colleges. Over 400 students attended the event and drafted a document stating the environmental concerns that they would like the government to focus on. Amongst other initiatives which emerged from this alliance, we refurbished a local school near our textile facility located in the Municipality of Masatepe, which is attended by some of our employees’ children.

Developing Computer Skills for Local Honduran Community Along with the Chamber of Commerce and House of Culture, we continued to support computer classroom training in El Progreso, including classes

on basic computer operations, internet navigation and utilizing Microsoft® software programs. In 2011, over 150 children and adults in the community received free computer training. As part of this program, we donated 25 new computers to a classroom in El Progreso and it was certified as an ‘Official Training Center’ by Instituto Nacional de Formación Profesional (INFOP), a Honduran government training institution.

Contributing to a National Reforestation Initiative in NicaraguaIn July 2011, employees from our Nicaraguan cut and sew facility joined forces with the National Reforestation Crusade, led by the Nicaraguan Ministry of Environment and Natural Resources, Ministerio del Ambiente y los Recursos Naturales (MARENA), National Forest Institute and the Mayor of Masaya, to partake in activities that contributed to reforesting

Enhancing Nicaraguan Students’ Environmental Awareness In an effort to support the local educational system in the municipality of Masatepe, Nicaragua, Anvil has partnered with the Ministry of Education and the Mayor of Masaya to develop an environmental lesson plan curriculum for the schools in the Department of Masaya. In October 2011, we launched a lesson plan project at the Republic of Venezuela School in Masatepe, where over 150 fifth and sixth grade students from this school received different lesson plans pertaining to environmental conservation, from recycling to waste reduction to organic farming. We also supplied all the needed educational materials, including writing materials and books.

We also became involved with a waste conservation program at the Republic of Venezuela School where some of our employees made a presentation on recycling to more than 250 fifth and sixth grade students at this school. The talk was presented with the support of the National Recycling Forum (FONARE), a leading non-governmental organization focused in environmental management aimed to educate students about the process of recycling and about how to implement these concepts at home and at school. As a result of this program, students began a recycling project for their classrooms. Also, in support of Teacher’s Day, Anvil donated over 300 t-shirts to the Republic of Venezuela School for the teachers of the municipality to use for school programs.

15,000 hectares of forest in the affected areas of Masaya brought on by drought. This initiative constitutes a part of the National Reforestation Crusade’s “Millions of Green Actions”, a program aiming to plant 100,000 trees of different species, with support of students, environmental groups and organizations operating in the surrounding communities.

Anvil donated over

to the Republic of Venezuela School for the teachers of the municipality to use for school programs.

300t-shirts

LA ALEGRÍA DE LOS NIÑOS FUE EVIDENTE EN TODO MOMENTO

Anvil employees join the community of Masaya in Nicaragua to plant trees as part of the National Reforestation Crusade’s Millions of Green Actions.

A class at the Republic of Venezuela School with projects made from the school supply donation that was part of the Lesson Plan curriculum.


Supporting Organic Cotton Farmers with Farm AidAs part of our ongoing commitment to support American organic cotton farmers and those transitioning to organic farming methods, we continued to support the annual Farm Aid benefit concert series in 2011.

Since 2009, Anvil has been the official t-shirt sponsor of Farm Aid and helped raised more than $500,000 in concert t-shirt sales to date to support the organization’s mission of keeping American family farmers on their land.

“ Farm Aid and Anvil are building a better kind of agriculture with a righteous concert t-shirt, made with organic cotton. We’re showcasing sustainable, innovative family farmers and offering eaters and wearers the chance to support those family farmers with their purchases.”Glenda Yoder Associate Director of Farm Aid

We brought some of the farmers from the Texas Organic Cotton Marketing Cooperative (TOCMC) with us to the 2011 concert in Kansas City, where they had the chance to talk with concert-goers about our partnership to support the organic cotton community in Texas.

An Earth Box model that was donated to Park Slope MS88 in Brooklyn, NY.

Launching an Organic Education Campaign in the United States

As one of the largest purchasers of American organic cotton, we believe that it is our responsibility to create awareness on the social and environmental benefits of organic farming and to make a connection between what we wear and how it is grown. During 2011, we launched an organic education campaign to educate the current generation of students about organic farming with indoor organic gardens and learning kits. Kits included organic soil, organic seeds and a guide to leverage the garden as a teaching tool. The organic farming lesson plan from TrackMyT.com was also provided.

In partnership with Earth Day New York, we donated over 120 indoor organic gardens to public schools in the Solar1 Network, a cohort of schools throughout New York City’s five boroughs with a thriving array of programs promoting urban sustainability and education. We also worked with Friends of Burlington Gardens and donated two indoor organic gardens to classrooms in Dillon, South Carolina, where our distribution center is located, and one in Kansas City, Kansas, as part of ongoing support for the 2011 Farm Aid concert.


Adult AnvilOrganic™ Fashion Tee Style 490


PRODUCTEnsuring that our products are safe for our customers is at the core of everything we do. From the beginning of the product life cycle - when we carefully identify the fibers used to make our products - through the production stage - when we adhere to ethical manufacturing standards - and until a product’s end use - when we work to educate consumers on how best to care for it, recycle and reuse it – we are constantly seeking to make improvements to our products.

Anvil Eco Collection Highlights: The AnvilSustainable™ brand is one of our most innovative products, made using 50% organic combed ring spun cotton and 50% post-consumer P.E.T. recycled polyester. In effort to support cotton farmers converting to organic methods, we have made a commitment to purchase their transitional fiber, when land undergoes a three-year process to become certified organic, and use it to manufacture the yarn used in AnvilSustainable™ t-shirts. When we exhaust transitional fiber supply, we then switch to organic cotton yarn for this style.


PRODUCT

A knitting machine creel at our textile facility.


1Recycled plastic bottles are collected

2 Collected bottles are ground into flake

3 Flake is processed through an extruder and then cut into pellets

4 Flake and pellets are blended together and processed to make staple fiber

5 Organic cotton fiber is blended with recycled polyester fiber

6 Fiber is spun into 50% organic combed ringspun cotton (or 50% ring spun organic cotton in conversion)/50% post-consumer P.E.T. recycled polyester. Yarn is then knit into fabric for AnvilSustainable(TM) t-shirts! View Product Safety page 24

STEPS

5050

Yarn is then knit into fabric for AnvilSustainable™ t-shirts

%

%post-consumer P.E.T. recycled polyester

organic combed ring spun cotton or 50% ring spun organic cotton in conversion

How the AnvilSustainable™ Fabric is Made:


ORGANIC COTTON AND TOCMCAnvil was ranked as the fifth largest organic cotton-using brand in the world by the Textile Exchange in 2011 and remains one of the largest purchasers of American-grown organic and transitional cotton.

Why We Believe Choosing Organic Matters• Organic farming restores the land back to its natural

state by reducing the amount of chemicals that end up in the ground

• Organic farming uses farming methods, such as crop rotation, as a natural way to preserve the soil and avoid pests and cover crops to fertilize the soil

• Beneficial insects and other organisms are released to control pest populations and weeding is managed by hand or mechanically

• No genetically modified seeds are used

Anvil’s Strong Relationship with the Farmers Makes a DifferenceSince 2008, we have maintained a close-working relationship with the organic cotton farmers from the Texas Organic Cotton Marketing Cooperative (TOCMC) and we are proud of the progress we have made since introducing the AnvilOrganic™ brand. However, the journey to organic comes with barriers along the way.

For instance, during the 2011 harvest season, some farmers in the southwest region of America lost a significant portion of their crop due to the lack of rain from a record breaking drought. We continued to support the organic cotton farming community by providing a fixed market for them to sell to, no matter what quantity was grown, all at an agreed upon premium to the price of conventionally grown cotton. This proved to be especially valuable for the family farmers in TOCMC.

Members of Texas Organic Cotton Marketing Cooperative at Farm Field Day 2011 in Lubbock, TX next to clean energy wind turbines used on the organic cotton farms that we source some of our organic cotton from.

As more consumers become aware of the benefits of growing organically, from both a social and environmental perspective, we see the demand for organic cotton goods increasing too. It is even apparent with our Private Label customers who are looking to increase the amount used in their product lines. This emphasizes the need for more support to farmers transitioning to growing organic.

AnvilOrganic™Our sustainability journey started with just one organic cotton t-shirt under the AnvilOrganic™ brand in 2007 and since then, we have become one of the largest buyers of US grown organic cotton. All AnvilOrganic™ t-shirts are made with organic cotton certified under the USDA National Organic Program.

“ The obstacles facing organic cotton production can be overcome when we reach the point where we have business and personal relationships that are built on a foundation of truth and trust. It is a great feeling knowing my buyers are up late at night watching the radar to see if it is raining on my farm.”Carl Pepper Texas Organic Cotton Marketing Cooperative


Life Cycle AssessmentsIn the past three years, we have conducted ten life cycle assessments (LCA) to develop ways to decrease the environmental impact of our products, from production, usage and disposal. Throughout all of these LCAs, the same end-result remains: the consumer stage has the overall largest impact on a t-shirt’s carbon footprint due to the energy used from the individual’s washing and drying habits. We see this as an opportunity to educate the end-users of our t-shirts on ways they can make a difference at home.

TrackMyT® as an Educational Tool to Reduce Impact of Owning a T-shirtTrackMyT® was created as anonline interactive website thatallows the user to discover thejourney their t-shirt has takenfrom farm to store, educatingthe viewer about the processesa t-shirt goes through, startingon the cotton field and endingup in their hands. Upon visitingTrackMyT.com, one can enter the unique tracking number on all Anvil youth t-shirts and American Tee Collection t-shirts. The site allows users to explore a cottonfarm, a gin and yarn spinner, aswell as Anvil’s textile mill, cut andsew plants and distribution facility.

Each stage of the t-shirt’s journeyalso contains lesson plans thatare available to download forteacher, parent and viewer alike.The final journey of the t-shirtends up in the ‘You’ module wheretips are provided to minimize thecarbon footprint of wearing at-shirt, such as using cold waterto wash and choosing air-dryingover the drying machine.

With the launch of the 2011 American Tee collection, we created a new version of TrackMyT® that showcases a new cut and sew facility that was used for the three styles. During the year, we also visited the organic cotton farmers from TOCMC and added new farmer profiles on the organic farm module after having interviewed them! On the ‘You Module’ viewers can see the carbon footprint

of their t-shirt.

Visit TrackMyT.com to see the journey of an Anvil t-shirt! Youth AnvilOrganic™ Fashion Tee Style 490B


T-shirt patterns in the cut and sew process are inspected by our quality-team.


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INTL CARBON FOOTPRINT PROFILES FOR ANVIL T-SHIRTS

AnvilSustainable™ kg CO2e/tee

AnvilOrganic™kg CO2e/tee

AnvilRecycled™kg CO2e/tee

3.29

3.11 3.9

93.4

43.3

52.3

82.3

32.1

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2.80

2.58

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1.65

1.58

1.41

2.73

1.88

1.84

1.68

United States Vs. European Union LCAStudy As we look to expand into the European market, we conducted a comparative LCA study between the United States and five European countries for the AnvilOrganic™, AnvilSustainable™ and AnvilRecycled™ styles. Data collected through the LCA was based on a colored large t-shirt for each style. The analysis, conducted by Verco Global, encompassed a cradle-to-grave approach, including the emissions associated with the production and refining of raw materials, the manufacturing and finishing of the fabric, the use of the product by the consumer and its ultimate disposal. For the European study, emissions associated with the transportation of materials, starting with raw material transport and ending at retailer location, were estimated for France, Ireland, Italy, Spain and the United Kingdom. Results show that France has the lowest carbon footprint due to the fact that their

primary source of energy isnuclear power and both Italy andSpain have lower footprints dueto a higher likelihood of air-drying clothing due to warmer climates. These studies help us gain a better understanding of the emissions associated with Anvil products in different geographic regions and how we can focus on initiatives to reduce the impact of owning a t-shirt.

Product Safety We are continuously seeking ways to make affordable and quality products with the highest standards of product integrity. The majority of Anvil apparel products (70% in 2011)—from both the eco and conventional lines—have been certified under the Oeko-Tex® Standard 100, which tests products against one of the most stringent product safety standards in the world, to ensure they are free of harmful levels of chemicals and substances that are harmful to the human body. The utilization of the Oeko-Tex® Standard 100 for product certification helps ensure that our t-shirts are safe for intended uses and meet rigorous internationally recognized quality and safety standards.

Inside our WRAP certified dye-house in Honduras.


Anvil’s Honduran textile facility’s water treatment facility


ENVIRONMENTAt all levels of operations, we are aware of the impacts of manufacturing in the regions where we operate. It remains an ongoing goal to reduce our environmental impact while preserving natural resources that are affected by production.

WaterAnvil’s two dye houses use over 96% of the total water consumed by all facilities. Although the processed water is cleaned before being returned to the water system through a private treatment facility at our Honduran textile facility and to a publicly owned treatment facility at our North Carolina location, the demand for water in production remains great.


Water (cont.)Throughout the past three years, our product mix has continually shifted to produce a greater amount of dyed t-shirts compared to white, due to the demand from our customers. Although more water is used in dying compared to bleaching, we have managed to decrease our water consumption by 15% compared to 2009. We did this by improving pre-treatment chemicals, which reduced the need for corrections that require more water, reducing the need for extra rinse steps in the dyeing and bleaching processes, and implementing an ongoing procedure by which the water used to cool fabric after it was dyed is recycled and used in another step in the manufacturing process.

Water Footprint ResultsIn 2011, Anvil conducted its first water footprint assessment in collaboration with PE International, for a style 979 dyed and white t-shirt. We learned that the biggest use of water comes from the agricultural phase of growing cotton, primarily from the withdrawal of ground or surface water for irrigation. In addition, water consumption for cotton growth differs depending upon local climate and rainfall. Most of the water used during manufacturing at Anvil locations is not actually ‘consumed’ since it is returned to the same watershed. While we confirmed that the water use in a bleached t-shirt is lower than a dyed t-shirt, the difference is negligible compared to the agricultural impact of growing cotton.

Indirect EnergyElectricity is the main type of indirect energy consumed by our facilities, mostly used for lighting, air conditioning and powering equipment. Electricity consumption increased by approximately 12% in 2011 compared to 2010 and our Honduran textile facility was the largest user of electricity due to energy used for knitting machines. Although our cut and sew facilities in both Honduras and Nicaragua are less energy intensive, we still invested in and installed more than 400 new, energy-efficient sewing machine units.

Biodegradable matter, such as woodchips and cardboard yarn cones, are combusted and turned into energy by the biomass boiler at our textile plant.

DEMAND FOR DYED VS BLEACHED T-SHIRTS CONTINUES TO RISE

WATER USE (L/T-SHIRT)

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36% Bleached

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WasteAnvil has set a priority to reduce the amount of waste sent to landfills and we are working to reduce our consumption, increase the amount of recycling and to reuse materials whenever possible. In 2011, we recycled 67% of our waste compared to 65% in the previous year. In addition, our textile facility in Honduras has reached a recycling level of 88%. We achieved these results through many initiatives. For instance, Anvil uses a minimum of packaging materials when delivering goods. We established sound recycling and reusing practices for the packing mediums in which our raw materials either arrive or are transported within our facilities.

Green House Gas Emissions We have been measuring ourgreenhouse gas (GHG) emissions at Anvil-owned facilities and offices since 2008. We used Gildan’s GHG data collection system,which accounted for Scope 1 emissions (direct emissions from fuel used to generate power at our facilities) and Scope 2 emissions (indirect emissions from electricity we purchase from others in order to power our facilities) to measure our 2011 GHG emissions, after the company was acquired.

Our GHG footprint decreased by 3% in 2011 compared to 2010 and we attribute this decrease to the reduction of energy used to heat the water at our dye house. Anvil is committed to improve its GHG emissions through greater energy efficiency projects at our facilities. In the future, we will look to Gildan’s manufacturing expertise to help us continually reduce our impacts.

Recycling Efforts to Minimize Waste at Manufacturing Facilities • The large plastic palettes, on which yarn cones arrive,

are all returned to the yarn spinner for reuse• Cones are sent to a biomass boiler, which burns them

to create steam• Plastic used to wrap large reams of finished fabric (used

for transportation from textile plant to one of our cut and sew facilities) is either sold to a local recycling program or given away for reuse

• All cardboard from packaging is recycled2009 numbers reflect a low production year due to the worldwide economic downturn.

GHG FOOTPRINTAll units in tons CO2e

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11% Biomass

23% Co-generation

66% Bunker Fuel

TOTAL DIRECT ENERGY USAGE

Direct Energy Anvil’s primary source of direct energy comes from bunker fuel, which is used to power the onsite boilers which produce steam for dyeing and finishing fabric at our Honduras textile plant. Although we have seen an increase in the percentage of dyed fabric produced, which uses more energy compared to bleaching fabric for whites, there was a 2% decrease in the total energy used to produce a pound of finished fabric in 2011 compared to 2007-2008. In fact, we produced more fabric and used less steam when we compared our 2011 production year to our 2008 production year. We can attribute this decrease in energy per unit to certain adjustments to the dye and bleach recipes that reduced dye bath temperatures and increased the reuse of cooling water.

For more information on Anvil and our commitment to social and environmental business practices, please visit us at AnvilCSR.com.

Anvil Corporate Social Responsibility

Rita LuppinoAdvisor, Corporate [email protected]

Telephone: [email protected]

anvilknitwear.com

Documents

Anvil CSR reposrt 2013