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Report on Nordstrom's Corporate Social Responsibility Initiatives

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Page 1: Nordstrom CSR Report
Page 2: Nordstrom CSR Report
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2011 CSR Report

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Leaving it Better 05

Caring for Our People 11

Supporting Communities 15

Sustaining the Environment 29

Protecting Human Rights 41

table of

CONTENTS

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2011 NORDSTROM CSR REPORT | | 07

We started to experience positive momentum during the

second half of 2009, which continued during the first half of

2010. This was a result of our ongoing efforts in the areas

of multi-channel execution, merchandising and inventory

management, new store and other growth opportunities

and, most importantly, improving customer service. During

the third quarter of 2010, these positive trends continued

to favorably impact our business, as we marked thirteen

consecutive months of total company same-store sales

increases, with accelerating sales growth on a two-year

basis, and five consecutive quarters of earnings improvement.

We strive to offer an outstanding customer experience,

regardless of channel, with compelling fashion merchandise

and high quality customer experience. This effort has con-

tributed to our recent performance, including sales growth

and gross margin expansion. By managing our inventories

effectively and flowing new merchandise into our stores

more quickly, we have been able to improve regular priced

sales, gross profit and inventory turnover. Our multi-channel

capabilities allow us to better serve our customers by offer-

ing greater access to our inventory and enabling them to

shop with us however and whenever they choose. We are

continuing to invest in these capabilities as part of our com-

mitment to improving the customer experience.

Our strong financial position enables us to continue to

invest in our business through store growth and remodels,

technology, merchandising systems and other opportuni-

ties. During the nine months ended October 30, 2010, we

opened three full-line stores and sixteen Nordstrom Rack

stores, and relocated one full-line store and one Nordstrom

Rack store. We have been encouraged by the results from

our store openings thus far this year. We are also working

to improve the online and multi-channel shopping experi-

ence by investing in areas such as online marketing, social

media, a web site redesign and updated merchandise allo-

cation and assortment systems in order to evolve with our

customers’ changing needs.

Our credit business continues to improve. Customer pay-

ment rates have returned to pre-recession levels, resulting

in improved delinquency and write-off trends. These bene-

fits have been partially offset by lower than planned finance

charge revenue. We continue to open accounts with high

credit quality.

While we remained focused on growing our business, we

believe there is still uncertainty in the current economic

environment and we do not anticipate any meaningful

change in overall consumer spending over the near term.

We expect to take advantage of opportunities to continue

to improve our execution and gain market share, as a

result of our customer-focused strategy, ongoing efforts

to improve service, compelling fashion merchandise and

financial flexibility.

Sincerely,

Blake W. Nordstrom

President, Nordstrom, Inc.

from the

CEO’SNOTE

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08 | |

We’ve always followed a simple philosophy when it comes

to running our business: Leave it better than you found it.

This also describes Nordstrom’s commitment to social

responsibility. Since our early days, we’ve focused on doing

the right thing for our employees and our customers. We

continue to make every effort to be an ethical company

where people want to work and shop. We’re working to

leave it better than we found it.

Our Culture

Just as we always strive to offer our customers the best

possible service and products, we also make every effort

to run an ethical business where people want to work and

shop. We’ve made this a priority since we began as a sin-

gle shoe store in Seattle and continue to do so today.

Our employees and customers have told us that they expect

Nordstrom to be the type of company that incorporates social

responsibility across all aspects of our business. Therefore,

we work hard to reduce our environmental impact, contrib-

ute to the communities we serve, and provide opportunities

and support for our employees. Our commitment to run-

ning a socially and environmentally responsible company is

something we take pride in ensuring every day through our

actions and philosophy.

Our Strategy

Making ethical business decisions that benefit our staff,

customers and communities is something we’ve done for a

long time. For example, we’ve been working with United

Way for nearly 60 years, and we began our profit-sharing

program with employees in 1952. We’ve also been recycling

corrugated cardboard, office paper, mixed paper, metals,

lamps, and pallets/wood in our Distribution and Fulfillment

Centers since 1999.

In the past, our various efforts were not organized under a

single program. Instead, we simply tried to do the right thing,

relying on our great employees to make choices that would

support our social responsibility efforts. And though that

worked for us and produced some good results, we realized

that we needed to focus our efforts and develop a more stra-

tegic approach. In 2007, we began the process of speaking

with employees and customers to learn more about what

matters most to them when it comes to social responsibility.

Based on their input, we brought together a group of leaders

from all areas of our business to help build a comprehensive

strategy. We decided to narrow our focus to four key areas

as they pertain to our business. We call them our “pillars”:

Supporting Communities, Sustaining the Environment, Pro-

tecting Human Rights, and Caring for Our People.

Making ethical business decisions that benefit our customers, employees, and communities is something we’ve done for a long time.

nordstrom’s

SOCIALEFFORTS

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2011 NORDSTROM CSR REPORT | | 09

Since then, we’ve broadened our efforts to develop innovative

programs around recycling, packaging reduction and sus-

tainable products, just to name a few. We’ve worked with

fantastic vendors who support social and environmental

initiatives, and we have empowered our employees to turn

their ideas for doing great things to reduce our environmen-

tal footprint or support the community into realities. We’ve

made great progress—but we know we still have much

more to do.

Our Efforts

With our efforts concentrated on our four social responsi-

bility pillars, we have created a number of programs and

initiatives that are currently in place or part of our future

plans. As we look ahead, we still have much we hope to

accomplish. We plan to continue working with our employ-

ees to turn their great ideas into positive change, while

also looking for ways to develop new products so we can

provide our customers with sustainable options. We will

seek out more opportunities to help communities around

the world and partner with organizations and vendors who

share that commitment. And we will continue to look for

innovative ways to reduce our environmental footprint.

We also believe that being transparent—sharing both our

successes and our opportunities—is an important part of

telling our continuing social responsibility story. That is why

each year we set goals (an important part of every aspect

of our business) within our four social responsibility pillar

areas and report on the progress we’ve made toward each

of them. Of course, we always hope that we’ll accomplish

what we’ve set out to do, but we also realize that we’re not

perfect. Through reporting what we’ve learned over the

years, we will hold ourselves accountable for our actions

and determine ways to make improvements into the future.

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12 | |

Diversity Commitment

We value the richness that diversity brings to our workforce

—it makes our company better and the communities we

serve stronger. We are proud of our efforts to maintain

a workforce that represents many backgrounds, and are

deeply committed to cultivating an environment where the

contributions of every employee, customer and vendor

are respected. We believe each of our employees has the

opportunity to realize their potential and contribute to the

success of our company. This commitment is reinforced by

our ongoing efforts in the areas of employment and promo-

tion, training, marketing and advertising, as well as through

our community relations and Supplier Diversity Program.

Wellness Program

We believe that no matter what the season, staying focused

on three basics—what we eat, what we do and how we

live—gives us all a better sense of balance. The Nordstrom

Wellness Program helps our employees put those elements

front and center. The goal is simple: support our people

in making smart decisions and positive changes about

their well-being. Through on-site health screenings, online

resources, coaching support and fun events in our stores,

we strive to provide an environment that supports and inspires

our employees to live a healthy life. We also have Wellness

Ambassadors: employees with a passion for wellness who

volunteer to promote the program among their coworkers.

We know that gaining new friends and having fun makes it

even easier to adopt good habits and build healthy behav-

iors year after year.

Nordstrom Cares Heroes

At Nordstrom, our people are our greatest asset; without

their support we wouldn’t be able to make progress in our

social responsibility goals. Our employees are at the heart

of our efforts and are helping us make a positive difference

across our company and in the world around us.

Nordstrom Cares Heroes highlights those employees who

have taken initiative to identify and come forward with oppor-

tunities to help create positive change. Their ideas and efforts

span many stores and regions. They range from finding ways

to become more environmentally conscientious within our

store operations to helping support and make a difference

in the neighborhoods that support us.

Any Nordstrom employee can become a Nordstrom Cares

Hero, and we look forward to sharing our people’s stories,

creative thinking and more about what they’re contributing

to our social responsibility program.

Our people are our greatest asset, and we believe social responsibility includes a commitment to creating a workplace that offers great benefits, fosters growth, and upholds diversity.

we have the

GREATESTEMPLOYEES

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2011 NORDSTROM CSR REPORT | | 13

NORDSTROM EMPlOyMENT DIvERSIT y STATISTICS

Total Employees

% Female Employees

% Employees of Ethnic Minority

Managerial Staff

Board of Directors

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16 | |

Nordstrom Scholarship Program

Nordstrom is committed to the communities where we do

business. Helping students achieve their dreams of higher

education is a meaningful way for us to show that com-

mitment. Since 1994, we’ve selected hard-working high

school students to receive $10,000 college scholarships.

Today, with educational funding becoming an even greater

challenge than ever, we have expanded our scholarship

program and are pleased to help 80 outstanding students

across the country take the next step toward achieving

their goals.

To qualify for the Nordstrom Scholarship, applicants must

be in their junior year of high school with a minimum grade-

point average of 2.7. Each applicantmust submit an essay

on one of three topics, along with a personal statement, finan-

cial information, a list of community activities and a certified

transcript from their school. Finalists are then forwarded to

a selection committee of local business leaders, community

partners, and representatives from Nordstrom, who help

select the winners.

Giving back to the diverse communities where we do business is inherent to our culture. We believe it’s the right thing to do—we simply support those who support us.

we proudly

ENCOURAGEEDUCATION

In 2011, students in the 28 states where Nordstrom cur-

rently has an operating full-line store will be eligible to apply

for a Nordstrom Scholarship. Eighty scholarships will be

awarded. Each scholarship will be paid out in equal install-

ments of $2,500 over four years to the selected student’s

college of choice.

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2011 NORDSTROM CSR REPORT | | 17

Linda Chen

Mill Creek High School

Metropolitan Atlanta

“When I walked into my principal’s office Monday morning

and saw all those I loved there, I was moved beyond compre-

hension. I do not think I will ever forget my mother’s smiling

face and my father’s tears as I embraced them both. Thank

you so much for this incredible opportunity and know that

the scholarship money will not be wasted. I hope to share

with others the fortunes I have received in life. I cannot say

this enough: thank you.”

Esther Owolabi

Fenwich High School

Illinois

“I really don’t know what to say! Thank you, once again, for

this amazing opportunity. I got home and saw the check

again and started crying. Haha! This has been such a bless-

ing and I’m truly honored, and still a little shocked! Thank

you and thanks to the entire Nordstrom Corporation for such

a wonderful scholarship program.”

Thomas Wilson

Pope John XXIII High School

New Jersey

“I cannot thank you enough for the Nordstrom Scholarship

Program. By your generosity, you have eased the tremen-

dous burden of having our family handle the expense of a

college education. This incredible gift allows me to fulfill the

chance of a lifetime, giving me the opportunity to improve

myself and become an asset to my community, which I could

not have realized without your kindness.”

2010 NORDSTROM SCHOl ARSHIP WINNERS

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Nordstrom has been a strong supporter of the United Way

for almost six decades. In addition to donations and vol-

unteerism on behalf of our employees, our corporate gift

to United Way is the single largest contribution we make to

one organization or group of organizations.

Our United Way History

Our relationship with the United Way began nearly 60 years

ago, when Nordstrom was a small business with just a few

shoe stores and the United Way was known as “Commu-

nity Chest” in Washington State’s King County. We became

involved with the organization because we believed it

offered our employees the best opportunity to give their

hard-earned dollars and know that, as a team, they could

make a difference.

Today we continue to support the United Way because we

believe it impacts our communities in ways no single agency,

individual, or government program can. Dollar for dollar, the

United Way does one of the best jobs of making sure our

contributions are used to maximum benefit. It has evolved

into an organization focused on solving complex social prob-

lems by directing resources to individual communities.

Day of Caring

Company-wide, our stores and headquarter employees also

participate in the United Way’s Day of Caring, a day dedi-

cated to local service activities designed to help community

organizations in need.

In 2010, Nordstrom and nearly three-quarters of its employees, donated more than $4.4 million to local United Way campaigns across the country.

we annually

DONATE TOCHARITIES

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vOLUNTEEriNg

Each year, Nordstrom employees

volunteer their time and effort for

United Way’s Day of Caring.

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NONPrOfiTS

Each year we donate millions of dollars

to nonprofits across the country. This

map shows the number of non profits

we suport by state.

30+ Nonprofits

10-19 Nonprofits

20-29 Nonprofits

1-9 Nonprofits

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We recognize that a meaningful social responsibility pro-

gram includes initiatives that ensure the well-being of the

factory workers who craft our products. By empowering

these workers with the knowledge and skills to make

informed decisions about their health, careers, and work

environments, we do our best to strengthen the communi-

ties from which our products and materials are sourced. Our

partnerships with industry organizations, service providers,

and other retailers also help make a positive, sustainable

impact through a variety of innovative programs.

Worker Empowerment

HERproject

In coordination with Business for Social Responsibility

(BSR), we provide funding for HERproject (Health Enables

Returns), a program that educates factory workers on gen-

eral and reproductive health issues, with a focus on HIv/

AIDS prevention in China. HERproject participants have

shown significant improvements in their knowledge of HIv/

AIDS infection and prevention.

Factory Worker Professional Development

Factory Worker Professional Development acknowledges

the evolution of the Chinese labor force. The program bridges

HERPROJECT: IMPROvED HIv/AIDS PREvENTION

82% of women who participated in HerProject said they attained enough knowledge to protect themselves against infection

99% of women who participated in HerProject said they will share what they learned with others

“We want to have a positive impact on workers’ lives that extends beyond the four walls of the factory.”

— Laura Hodgson, Nordstrom Social Responsibility

the gap between factory workers seeking enhanced career

skills—but without access to relevant training—and manag-

ers who wish to attract and retain skilled employees—but

whose primary focus is on survival in the ultra-competitive

business environment.

working to

IMPROVELIVES

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2011 NORDSTROM CSR REPORT | | 25

Canteen Project

Over time, we have observed that many complaints from

factory workers relate in some way to their factory’s can-

teen operation. The Canteen Project gives workers a voice

in the selection and preparation of their food, provides edu-

cation on nutrition, and introduces the concept of increased

worker participation in factory administration.

Verité Van Training

Nordstrom partners with verité, an independent auditing,

training and research organization, to raise awareness on

the practical concerns of big-city living for young factory

workers from rural hometowns. We’ve facilitated mobile

training sessions with verité to provide workers in China

and India basic education on life skills, women’s health, HIv/

AIDS, and sexual harassment. The training ensures that

workers acquire skills to help them in their everyday lives

while improving factory morale.

Highlighting factory workers’ role

Human Connection

From concept to sale, we recognize that many hands touch

our products. The Human Connection is an initiative that

highlights the critical role factory workers play in the devel-

opment of our products. Through visual media, this initiative

makes a positive connection between each factory worker’s

efforts and a consumer across the globe who ultimatelyfeels

beautiful as a result of that hard work.

Helping farmers grow sustainable fibers

Textile Exchange

Our support of organic cotton organizations is part of our

goal to increase the percentage of organic cotton used in

our private-label merchandise and available for use by our

branded vendors. We are currently partnering with the Tex-

tile Exchange (formerly Organic Exchange) to aid farmers in

Africa who grow organic cotton.

The Textile Exchange is a non-profit organization committed

to expanding the global market for sustainable fibers—with a

core focus on organic cotton. Part of the Textile Exchange’s—

and our—long-term goal is to reduce the negative impact of

textile production on people and the environment.

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Since our Supplier Diversity Program began in 1989, we have

formed hundreds of partnerships with different minority-

and women-owned businesses that provide merchandise,

supplies, services and construction to Nordstrom and have

purchased more than $9 billion worth of products and ser-

vices from those businesses.

Nordstrom in Your City

One important indicator of success for Nordstrom is how

well we reflect the communities we serve. Recognizing that

diversity is vital to our business, we launched our Supplier

Diversity Program in 1989. This program actively promotes

Nordstrom to qualified businesses that might not other-

wise have considered Nordstrom as a potential client.

In each of the relationships with our thousands of business

partners worldwide, we see the potential for success. Our

business decisions are focused toward the future, yet still

based on John W. Nordstrom’s founding philosophy: Offer

the customer the best possible service, selection, quality

and value.

Building relationships

The Nordstrom Supplier Diversity Program recruits vendors

from a wide range of businesses including merchandise,

supplies and services, and construction. Merchandise is, of

course, highly competitive and managed by buyers in their

particular department. Supplies and services make up the

day-to-day support needs that help create a comfortable

and inviting shopping experience for our customers. Each

of these specialized areas offers us numerous opportuni-

ties to partner with vendors within your community.

For construction vendors, our initial outreach into a commu-

nity is the Project Preview. These represent the first steps in

our diversity program and are conducted about one year

prior to the opening of a new store or the remodel of an

existing store. This is an open invitation for all minority and

women construction vendors and subcontractors to meet

our general contractor and representatives from Nordstrom.

Nordstrom and You

We’ve found that our Supplier Diversity Program helps form

community contacts with a wide range of business and civic

leaders. Our hope is that the resulting opportunities will not

only benefit Nordstrom and its business partners, but aid in

boosting the economic vitality of the communities we serve.

We launched our Supplier Diversity Program more than 20 years ago to help attract qualified women-and minority-owned vendors who might not otherwise consider Nordstrom.

actively promoting

SUPPLIERDIVERSITY

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2011 NORDSTROM CSR REPORT | | 27

1998

0

100

200

300

400

500

700

600

1999 2000

ANNUAL TOTAL PER YE AR

TO

TA

L E

XP

EN

DIT

UR

ES

(IN

HU

ND

RE

D M

ILL

ION

S)

2001 2002 2003 2004 2005 2006 2007 2008

SUPPlIER DIvERIST y PROGRAM TOTAl EXPENDITURES

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30 | |

Catalog

We strive to deliver catalogs to our customers that highlight

great fashion and trends, while also doing our best to con-

sider the environmental impacts producing catalogs can

have. Today, all the catalog paper we purchase is certified by

the Forest Stewardship Council (FSC), recognized for setting

responsible forestry environmental standards. Nordstrom is

a leader in this category, setting a standard for all catalog

paper to be FSC-certified with a goal of 30% PCW content.

Energy and Water

Energy efficiency and water conservation are key areas of

focus for us. We’ve reduced our per-square-foot energy use

by 4.1% during the past year alone and our goal is to continue

decreasing energy demand across our operations over the

next five years. Water use at Nordstrom has also dropped due

to our successful conservation efforts. Some of the tools and

methods we’re using are included below.

Responsible Water Use

We believe responsible water use applies to conserving water

and protecting water quality. At Nordstrom, water conser-

vation means careful watering practices in our landscaping,

and regulated flow toilets and waterless urinals in our newer

facilities and stores.

Paper and Packaging

When it comes to protecting forests, our goal is to imple-

ment paper-use solutions that conserve forest resources,

maintain our quality standards and continue to meet our

business goals. We’re making great progress. Between 2006

and 2007, we decreased our use of office paper by seven

tons. Mailings from Nordstrom stores dropped by 74 tons,

and catalog paper requirements alone fell by 145.5 tons

due to smarter and more focused mailings.

PAPER PRODUCTS USAGE

3.018

39% 46% 48%

3.3303.146

2009GOAL

2010GOAL

2009RESULTS

Tonnage of Packaging per $1 Mill ion of Sales

Percent of Recycled content

We realize that virtually every aspect of our business affects the environment, and that’s why we are committed to reducing or eliminating those impacts wherever possible

conserving the

EARTH’SRESOURCES

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Lighting Upgrades

Our energy use has dropped significantly over the past two

years due to lighting upgrades. We’ve installed newer, more

efficient technologies that conserve energy and provide

higher-quality lighting. Through a combination of new occu-

pancy sensors and enhanced lighting fixtures, we decreased

electrical usage by an estimated 3.2 million kilowatt hours

in 2009.

Heating, Cooling and Other Systems

We pilot energy-efficient heating, cooling and other systems

designed to reduce energy. For example, at our Ala Moana

store in Honolulu we installed an air conditioning system

that cools the store in the daytime by using stored ice,

without running the mechanical cooling element. In Hawaii—

where energy costs are often some of the highest in the

nation—Nordstrom is committed to being a responsible

community partner by not pulling electricity off the grid dur-

ing peak demand daytime hours.

Our Carbon footprint

Getting merchandise from our distribution centers to our

stores and customers is critical. We believe product delivery

can occur efficiently and on schedule while simultaneously

reducing our carbon footprint, and we have several initia-

tives in place to help. One example is speedometer controls

on delivery trucks to improve fuel mileage as merchandise

is moved from our distribution centers to Nordstrom stores.

The trucks’ maximum speed is electronically set to 65 mph

and an on-board computer system monitors driver behav-

iors that affect fuel efficiency, such as rapid acceleration or

hard braking.

-3.5% -3.5%

-4.3%

REDUCED ENERGY USAGE

2009GOAL

2010GOAL

2009RESULTS

7.25 7.25

6.63

INCREASED FUEL EFFICIENCY

AVERAGE DELIVERY MPG

2009GOAL

2010GOAL

2009RESULTS

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recycling Programs

From paper and plastic to glass, aluminum, computer hard

drives and organic waste, we’re looking for ways to recycle

wherever we can.

Comprehensive Recycling Company-Wide

Recycling bins for customer and employee use are available

in all of our stores. Our recycling program began in 2008 and

now captures aluminum, paper, cardboard, plastic, glass

and compostable materials. While there is still plenty to do in

this area, we are continuing to make steady progress.

Technology Recycling

Through our IT Asset Recycling Program, we’re working

with a third party to reuse, sell and properly dispose of old

computers. All hard drives leaving a Nordstrom location for

recycling are reformatted or password protected to ensure

the information they hold remains secure. We also work with

office supply partners to recycle used printer and copier

toner cartridges.

Organic Waste Recycling in Stores

We currently have approximately 45 stores and four support

facilities involved in organic recycling programs. For exam-

ple, in our Scottsdale Fashion Square store, partner Singh

Farms works closely with our team to use composted mate-

rial as fertilizer on landscaped areas around the store.

“Lessening our environmental impacts as we grow as a business is an important priority for Nordstrom.”

— Keli Stosich, Nordstrom Energy Specialist

INCREASED ORGANIC RECYCLING

+2%

+4%

+3.1%

2009GOAL

2010GOAL

2009RESULTS

Percentage of total organic (food) waste from our restaurants recycled

into composting programs.

doing our part to

RECYCLEWASTE

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INCREASED RECYCLING RATES

80%

90%

82%

2009GOAL

2010GOAL

2009RESULTS

Percentage of total waste diverted from landfills and/or incinerators,

and into recycling streams.

reducing Harmful Chemicals

Whenever we can, we use alternative, sustainable options

rather than harmful chemicals. Since 1996, we’ve been

testing our products for banned and limited-use chemi-

cals. In 2008, this list was expanded when we adopted the

American Apparel and Footwear Association’s Restricted

Substance list. We also transitioned all of our cleaning

supplies to low- and non-toxic products in 2009.

Organic Cotton

The use of organic cotton helps Nordstrom minimize the

environmental effects of agrochemicals and lessens expo-

sure to harmful chemicals for farm workers and people living

in farming communities. We’re dedicated to increasing our

use of organic cotton and supporting global organizations

that provide aid and education to organic cotton farmers,

such as the Textile Exchange.

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Where do our products and packaging come from? Where

do they go after they leave our stores? These are not always

easy questions to answer—our stores are just one link in a

complex supply chain that connects communities across the

globe. While we don’t always have direct control over how

goods are made or what happens after the sale, we do have

influence to make positive change happen. Our goal is to

make a difference up and down the supply chain by reduc-

ing waste, using recycled materials, supporting eco friendly

products, and offering customers responsible choices.

Sustainable Products

Well Beauty

Find hundreds of natural, organic, or chemical-free products

at our Well Beauty cosmetic boutiques in 25 stores and on

Nordstrom.com. Every Well Beauty product is paraben and

petro-chemical free and sold in recycled packages.

Organic Cotton

Organic farming methods replenish soil and reduce the use

of toxic pesticides and fertilizers. We offer a wide selection

of popular brands that use organic cotton.

Eco-Conscious Style

For just about everything you’re looking for, we offer a brand

made from environmentally friendly materials.

Packaging, Bags, and Boxes

Recycling is just one part of the sustainable packaging

cycle. Reducing and reusing are just as critical. All bags and

boxes at Nordstrom are now recyclable, and we’re also using

less packaging and choosing products made of recycled

content and material.

• 100%-recyclable bags and boxes. If it came from us,

you can put it in the recycle bin.

• Reduced packaging at Nordstrom.com. More box sizes

means a better fit for merchandise and less waste.

• Nordstrom Rack shopping bags. Made of 80% recycled

content, Nordstrom Rack shopping bags also have an

additive that helps them decompose in landfills—just in

case some don’t make it into a recycle bin.

• Reusing shipping boxes. Our Distribution Centers also

reuse corrugated shipping boxes when possible to help

cut down the amount of packaging we use.

innovations for

PRODUCT PACKAGING

Our goal is to make a difference up and down the supply chain by reducing waste, using recycled materials, supporting eco friendly products, and offering customers responsible choices.

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ECO-friENDLY

Nordstrom is proud to offer apparel,

shoes and accessoreis that are made

with environmentally friendly material.

This reusable tote is made from recy-

cled water bottles.

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36 | |

While cotton is a beloved fabric, it is also one of the most

environmentally damaging materials to produce. At Nord-

strom, we considered this dilemma as we developed our

social responsibility strategy around sustaining the environ-

ment. Organic cotton development was an obvious choice

when considering all of the ways we could make an impact

and difference, given it connects directly to our business.

Limiting Pesticides and fertilizer

Cotton accounts for only 3% of the world’s agricultural crops,

yet it requires more pesticides—25% of all agricultural

chemicals used on the planet—than any other single crop to

grow. By using organic cotton, we help to reduce chemical

pesticide and fertilizer use. This has helped limit exposure

to harmful chemicals for the farmers involved in growing

organic cotton.

industry Support

As we continue to increase the amount of organic cotton in

our merchandise, we want to support the organic-cotton-

growing community. We now support organizations like the

Textile Exchange (formerly the Organic Exchange) which

provides aid and education to organic-cotton farmers, while

working to increase the global market for sustainable fibers

including organic-cotton, bio-based and recycled fibers.

One of the goals of this organization is to help farmers cre-

ate a long-term, sustainable program that influences trade,

builds strong communities, provides sustainable training,

and enriches the lives of cotton-growing farmers.

in Our Merchandise

We use organic cotton as a standard raw material in much

of our Nordstrom label merchandise. The “Eco-Conscious

Style” sections of our website feature merchandise made with

organic cotton and other environmentally friendly elements.

“We are committed to using organic cotton as part of a broader eco focused strategy, and our goals include increased usage each year.”

— Matthew Tracy, Nordstrom Product Group

supporting

ORGANICCOTTON

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2011 NORDSTROM CSR REPORT | | 37

0

100

200

300

400

500

900

800

700

600

YE ARLY USAGE

PO

UN

DS

OF

CO

TT

ON

(IN

HU

ND

RE

D T

HO

US

AN

DS

)

Total as ofNovember

20102009200820072006

yEARly ORGANIC COT TON USAGE

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38 | |

Organic and Sustainable

Just as we strive to provide sustainably produced apparel

and goods in our stores, we are equally committed to offering

sustainably produced foods and beverages in our restau-

rants and coffee bars. We know our customers—just like

us—want food choices that are the result of environmentally

and socially responsible practices.

• From a fresh mix of baby lettuce, spinach and arugula

to vine-ripened tomatoes, we source local and organic

market produce whenever possible. This supports local

farmers and minimizes greenhouse-gas emissions during

transport from farm to table, and provides our custom-

ers with the freshest choices.

• All of our eggs are cage free and organic.

• When possible, we are committed to sourcing from sup-

pliers who use the most humane processing methods

commercially available. As of October 2010, all the turkey

we use comes from suppliers utilizing CAK—considered

the most animal-friendly poultry processing method.

• We offer organic iced tea, and our specialty coffee bars

offer fair-trade coffee that is also organic.

Healthy Choices

Just as we aspire to offer food and beverages that are bet-

ter for the planet, we also work hard to provide customers

with choices that are better for their health. We search for

food products without unhealthy additives, and strive to pro-

vide nutritious, delicious options for Nordstrom shoppers.

• We do not use liquid dairy products produced with bovine

growth hormone (rBGH).

• We have eliminated hydrogenated and partially hydroge-

nated fats and oils—the root source of unhealthy trans fats

—from all menu options. We support the federal govern-

ment’s standards for food-content reporting, but our goal

is to share even more information with our customers

about the foods we offer whenever possible.

• Phamphlets with nutritional information for all of our menu

items are available in every restaurant and specialty cof-

fee bar in our company.

We take pride in providing fresh, delicious options while partnering with vendors that produce healthy foods. Sharing information about what we serve helps our customers make wise choices.

our coffee bars and

RESTAURANTS

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18

25

20

FOOD INDEX RATING

2009GOAL

2010GOAL

2009RESULTS

Waste reduction

The packaging we use and the way we manage waste from

our restaurants and coffee bars are as important as the food

itself. We continually seek more environmentally responsible

packaging, along with new ways to reduce the amount of

packaging we use in our restaurants and coffee bars.

• All menus and other printed materials in our restaurants

and coffee bars contain a minimum of 30% post-con-

sumer waste.

• We’ve transitioned to an environmentally friendly dis-

posable cup called the EcoTainer.

• An organic recycling program in our restaurants—where

local composting facilities exist—helps us convert waste

to compost, resulting in nutrient-rich soil.

We created the Nordstrom Food Index Rating, a zero to 25 point weighted system, to measure our progress when it comes to pro-viding healthier food choices that are also produced with greater social and environmental benefits in mind. Scoring for each of the four priority food categories (use of rBGH-free dairy, organics, trans fat-free food, 100% Fair Trade tea and coffee offerings) is based on the percentage of all stores that have the option in place.

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Conducting supplier training

For many years, we have conducted a comprehensive train-

ing program for the partners who produce our private-label

merchandise. Each of our suppliers learns about the Nord-

strom Code of Conduct, Nordstrom Partnership Guidelines,

our Social Responsibility audit process, and the general

Nordstrom compliance guidelines. We also provide partner

training on issues such as worker retention, productivity and

efficiency, the environment, and management systems.

routine auditing

Our team takes routine audits of partners seriously and works

to ensure that our Partnership Guidelines are followed. Dur-

ing an audit, we join with independent, thirdparty monitoring

companies to review and assess physical surroundings,

compensation, and working-hour documentation. We also

gather input from workers and managers. New vendors are

reviewed and compliance levels are assessed before we

approve any facility for production of Nordstrom labeled

merchandise. Once the auditors have reported their findings,

our program managers and partners work together to address

any compliance issues.

factory remediation

We believe compliance is an ongoing process—and we begin

the process with an extensive assessment to identify poten-

tial labor, health and safety, and environmental issues. From

these findings, we create a corrective action plan and assist

our factory partners in addressing any challenges. Trans-

parency and continuous improvement is our goal. We work

hard to achieve that goal by tapping the expertise of factory

management and taking into account operational realities.

We partner with leading industry organizations and consul-

tants to provide in-depth training and planning for factory

management to address complex compliance issues. Our

team has addressed a broad range of remediation proj-

ects, including production and efficiency, wages, overtime

reduction, management systems and worker retention and

safety. We focus on working with key suppliers who have

demonstrated a commitment to transparency and continu-

ous improvement.

Terminating Relationships

If we are unable to successfully remediate any unethical and

unlawful labor practices with a vendor, we consider termi-

nating the business relationship.

We value the many people around the world who help us manufacture high-quality Nordstrom products, and we strive to ensure that their rights as workers are protected.

making sure we

MANUFACTURERESPONSIBLY

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Business for Social responsibility

Our efforts to ensure the health and safety of factory workers

are supported by several third-party organizations, including

Business for Social Responsibility (BSR). Through our part-

nership with BSR, we collaborate to improve conditions in

factories, to create sustainable sources of clean water, and

to develop long-term solutions for fair and safe factory con-

ditions that exceed basic compliance monitoring.

Improving Working Conditions

Nordstrom has been a member of the Business for Social

Responsibility (BSR) since 1998. During that time we have

partnered on a number of projects. One of these is HERpro-

ject—an initiative that strives to improve women’s general

and reproductive health by providing health education and

services to female workers in our contracted factories.

We also support a professional development program for

factories in China through BSR’s China Training Institute.

Participation in BSR allows us to collaborate with people and

businesses across many industries and around the world,

with the mutual goal of improving social responsibility.

In addition to HERproject, we are actively working with BSR

on the following programs:

Apparel Mills and Sundries Working Group

We have partnered with other leading retail companies and

apparel manufacturers to form BSR’s Mills and Sundries

Working Group. The Group’s purpose is to establish con-

sistent expectations that help apparel and sundry suppliers

achieve fair, healthy and environmentally safe working con-

ditions in their factories. Key to this partnership is an effort

to move away from a top-down audit approach and toward

practices promoting transparency, knowledge sharing, and

collaboration between buyers and suppliers. We believe

that the Mills and Sundries Working Group is creating a

sustainable model to benefit workers and the environment.

At the same time, the Group is improving economic perfor-

mance through shared sustainability principles, diagnostic

tools and reporting mechanisms.

Beyond Monitoring Working Group

Since 2002, we have participated in BSR’s Beyond Monitor-

ing Working Group to provide a platform for creating truly

sustainable supply chains. The Group helps buyers and

suppliers integrate sustainable labor and environmental

practices into their supply chains. We’ve found embracing

BSR’s Beyond Monitoring approach—with its four key com-

ponents—to be the most effective way of improving global

working and environmental conditions. These four key com-

ponents include:

• Internal alignment between the commercial and sus-

tainability objectives of buyers

• Supplier ownership of environmental conditions and labor

• Empowering workers to be informed and participatory

constituents

• Public policy frameworks that foster public-private dia-

logue, partnerships, and local solutions

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44 | |

PARTNERSHIPGUIDELINES

Wages and Benefits

Suppliers shall set wages, overtime pay and legally mandated benefits and allow-ances in compliance with all applicable laws. Workers shall be paid at least the minimum legal wage or a wage that meets local industry standards, whichever is the greater amount.

Forced Labor

Nordstrom will not conduct business with any Supplier that uses involuntary labor of any kind, including prison labor, indentured labor, or forced labor. Employees shall not be required to lodge “deposits” or identity papers upon commencing employment with the company.

Freedom of Association

Suppliers will respect workers rights to freedom of association and collective bargaining.

Our guidelines: Standards for our business suppliers

At Nordstrom, we recognize that our success is based on the quality of our rela-

tionships with customers, employees, agents, suppliers, and communities. To

maintain the high caliber of these relationships and to achieve our goal of always

providing the best product in the most equitable manner, we have established

standards for our business suppliers. In communicating these guidelines,

we hope to identify potential supplie,rs who share our commitment to quality

products, business principles and community relationships. We will only engage

business suppliers who demonstrate a commitment to contribute to the improve-

ment of working conditions and strive to meet our requirements stated in the

Nordstrom Partnership Guidelines.

Legal Requirements

Nordstrom expects all of its business suppliers (“Suppliers” as used in these Partnership Guidelines includes all agents, vendors, manufacturers, factories and subcontractors) to comply with the appli-cable laws and regulations of the U.S, and those of the respective country of manu-facture or exportation. All products must be accurately labeled and clearly identified as to their country of origin and content. The language to be used for purposes of notice and interpreting the meaning of these guidelines shall be English.

Health and Safety

Nordstrom seeks Suppliers who provide written standards for safe and healthy work environment for their workers, includ-ing adequate facilities and protections from exposure to hazardous conditions or materials. These provisions must include safe and healthy conditions for dormitories and residential facilities, and they must comply with local health and safety laws and standards.

PARTNERSHIPGUIDELINES

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Nondiscrimination

Nordstrom firmly believes people are enti-tled to equal opportunity in employment. Although the company recognizes that cul-tural differences exist, Nordstrom will not pursue business relationships with Sup-pliers who discriminate in employment, including hiring, salary, benefits, advance-ment, discipline, termination or retirement on the basis of gender, race, religion, age, disability, sexual orientation, nationality, marital or maternity status, work or per-sonal affiliations, political opinion, or social or ethnic origin.

Child Labor

Suppliers will not employ anyone under the age of 15, and/or younger than the age of completing compulsory education, or under the minimum ages established by appli-cable law in the country of manufacture, if higher than the age of 15. Furthermore, Suppliers of any kind will not expose any-one under the age of 18 to situations in or outside of the workplace that are hazard-ous, unsafe or unhealthy, and will provide adequate protection from exposure to haz-ardous conditions or materials.

Hours of Work/Overtime

While permitting flexibility in scheduling, we will identify local legal limits on work hours and seek Suppliers who do not exceed them except for appropriately compen-sated overtime. While we favor Suppliers who utilize less than 60 hours per week, we will not, require in excess of 48 hours per week and 12 hours overtime per week, or as permitted by applicable law, which-ever is lower. Employees should be allowed one day off in seven.

U.S. Customs

Suppliers will comply with applicable U.S. Customs importing laws and, in particular, will establish and maintain programs and documentation to support country-of ori-gin production verification, to avoid illegal transshipping.

Suppliers shall seek ongoing education regarding Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security requirements, establish an action plan for compliance, be prepared for sup-ply-chain security audits by Nordstrom and/or third-party auditor, and maintain standards set therein.

Environment

Suppliers must demonstrate a regard for the environment, as well as compliance with applicable environmental laws. Fur-ther, Nordstrom actively seeks Suppliers who demonstrate a commitment to pro-gressive environmental practices and to preserving the earth’s resources.

Documentation and Inspection

Nordstrom intends to monitor compliance with our Partnership Guidelines and to under-take on-site inspections of Suppli-ers’ facilities. Suppliers will maintain on file all accurate documentation necessary to demonstrate compliance and will authorize Nordstrom and its designated agents to engage in announced and unannounced monitoring activities to ensure compliance, including confidential employee interviews. Nordstrom will review and may terminate its relationship with any Supplier found to be in violation of the Partnership Guidelines.

Subcontracting and Changes in

Manufacturers, Factories, and

Vendors

Suppliers will not utilize subcontractors for the production of Nordstrom products or components without written approval and authorization from Nordstrom, and only after the subcontractor has agreed to comply with the Partnership Guidelines. Suppliers will not change manufacturers, factories, subcontractors or vendors for the production of Nordstrom products without written approval and authoriza-tion from Nordstrom, and only after the new factory, subcontractor, or vendor has agreed in writing to comply with the Part-nership Guidelines.

Animal Welfare

Nordstrom promotes strict adherence to codes of practice that meet or exceed International, National and State Govern-ment standards for animal welfare. We strive to do business with Suppliers who source leathers, furs and any other animal by-product from entities who use fair and humane animal-welfare practices.

The Kimberly Process

Nordstrom expects all of its business Suppliers to purchase all diamonds from legitimate sources not involved in funding conflict, and in compliance with United Nations resolutions. This shall also be stated as such on all invoices, wherein the seller guarantees that all diamonds are con-flict-free, based on personal knowledge and/or written guarantees provided by the supplier of the diamonds.

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For more information on our Corporate Social Responsibility initiatives, please visit www.nordstromcares.com

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