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Diversity, Equity & Inclusion | www.opensesame.com | (503) 808-1286 | 3 One of the biggest challenges facing manufacturers today apart from pandemic impacts, social justice protests, and a changing consumer base is an increasingly tight labor market and the hiring and retaining of talent. Diversity, equity and inclusion status matters to today's employee pool, many of whom believe companies have an obligation to work towards an equitable society. Nothing transmits a tone-deaf values statement more than a consumer business that does not hire diverse team members and retain them with an inclusive and equitable culture. To not do so is to ignore the changing face of the country – and current and potential customers. According to the US Census, immigration is projected to overtake natural increase (the excess of births over deaths) as the primary driver of population growth for the country in the year 2030. By the year 2045, the US white population is predicted to have minority status at less than 50% and 36% by 2060. 3 It is important to recognize the reality that no single group is going to represent a majority of the country's population in years to come. We are a nation of immigrants (around one in seven of or 44 million) were born in another country, and most American's have immigrants in their family tree. 4 This is a challenge for an industry with nearly homogenous representation at the senior leadership level and in C-suite personnel. In 2019, only 26% of women sat on the board of retail and consumer companies and only 14% of that number were executives. The nation's Hispanic populace is expected to triple by 2050 while Black and Asian populations are each expected to grow by 60%, 5 and yet just 16% of board seats and 13% of executive positions were held by ethnically diverse individuals. 6 To broaden its reach to non- male and non-white identifying populations, retailers need to change their perceptions and challenge their own unconscious bias in defining roles traditionally held by uniform groups. 1 The Retail Industry Leaders Association (RILA), with McKinsey & Company, 2021. 2 "The diversity imperative in retail." Tiffany Burns, Diana Ellsworth, Emily Field, and Tyler Harris. January 2021. 3 "The US will become 'minority white' in 2045, Census projects." William H. Frey. March 2018. https://www.brookings.edu/blog/the-avenue/2018/03/14/the-us-will-become-minority-white-in-2045-census-projects/ 4 "Demographic Turning Points for the United States: Population Projections for 2020 to 2060." Jonathan Vespa, Lauren Medina, and David M. Armstrong. Revised February 2020. 5 "Why Diversity is Crucial for Success in Retail." Shannon Sweeny, https://www.monster.com/career-advice/article/why-diversity-is-crucial-to-success-in-retail. 6 "The diversity imperative in retail." Tiffany Burns, Diana Ellsworth, Emily Field, and Tyler Harris. https://www.mckinsey.com January 2021. Retail is the nation's largest private sector employer with 40+ million workers in over 3.5 million retail establishments. 1 Any kind of change or disruption can result in ripples of epic proportions, impacting the lives and livelihoods of millions of Americans. Retail businesses have experienced acute challenges as a result of the COVID-19 pandemic, impacting staffing, training and daily operations. Social distancing, testing and cleaning protocols, and store capacities have required the restructuring of operations and have caused many businesses to close. Existing challenges in the form of hiring and retaining quality staff, rising costs, operational problems, and e-commerce (multi- and omni-channel) are now co-existing with the new realities of post-COVID operations. Additionally, the implications of shifting economic equity, consumer behaviors, and demographic changes coalescing over the last few decades have been jolted into manifestation by the pandemic and ongoing social and racial justice movements. The acceleration of changing consumer identities also accompanies a shift in growing consumer expectations, value and values-driven purchasing. Goods must be of better quality and offer greater choice and convenience; speed of delivery is paramount, and value is king. Today's shopper is also more diverse than ever, and many younger ones are aligning their desire for social justice, including support for diversity and inclusion, with their purchases. Current State of Retail A Snapshot of Labor More than 75% of Gen Z consumers will terminate any relationship with a company that markets ads they find macho, racist or homophobic. 2

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