Sloths give birth to the baby sloth just like a human gives birth to a baby.
The sloth gives birth to a baby sloth that has an umbilical cord like humans do.
However when a baby sloth is born it's born in the tree and then dangles from the mother sloths umbilical cord for a few seconds.
Then the mother sloth reaches down and grabs the baby sloth and pulls it back up the tree and cradles it and takes care of it.
The mother sloth then removes the umbilical cord themselves and then cares for the baby sloth.
The sloth mates with another sloth in the tree and then also gives birth to the baby sloth in the tree.