Fifth Biggest Retailer in the World is Going Green

It is the fifth biggest retailer in the world, ranks 11th on the Fortune 500 and has 848 warehouses worldwide. Costco is going green.

This US mega-retailer is already part way there. In addition to reducing CO2 levels internally and in its supply chain, Costco is setting sustainability as a core part of its mission. In 2020, it is estimated to have emitted approximately 141 million metric tons of CO2e. Now it looks beyond its own operations and to that of its supply chain. The company plans to introduce more reduction targets later this year after surveying its top 500 suppliers to understand their CO2 emissions and how they track them.

As stated in its mission statement, the company is committed to human rights, diversity, equity, inclusion, water conservation, waste reduction, and decarbonization.

Scope 1 and 2 reductions will be reached by further greening its energy supply and increasing energy efficiency. For example, refrigeration contributed approximately 24% of the company’s emissions in 2021; by 2030, this figure will be reduced by 30%. Additionally, the company will purchase 80% green electricity by 2030 through renewable energy credits that guarantee clean power production. But it will also generate its own clean energy; the retailing giant already owns and operates more than 100 on-site solar systems and intends to expand these operations.

Costco’s teams are already evaluating the use of electric vehicles in their operations, piloting the use of electric equipment and conducting electric vehicle charging tests at multiple warehouses. By 2035, the company says it will have converted all of its depot yard trucks from diesel to electric or some other clean fuel.

Aside from electrifying more of its operations, the company will also design its warehouses, depots, and manufacturing facilities to be energy efficient and to produce less waste. Investing in staff, it is training 50 employees to become certified energy managers.

The company is also optimizing the use of green space at its warehouses by planting trees and increasing the planting density of drought-tolerant plants and native plants in landscaping.

In its warehouses, most energy is used for refrigeration, heating, cooling, lighting, food preparation, and hot water. It monitors this closely by performing energy audits and taking energy efficiency measures like better insulation and high-efficiency lighting systems.

Costco will be focused on reducing Scope 3 emissions with its suppliers as part of a larger ESG program. Suppliers are audited regarding traceability, human rights, animal welfare, environmental stewardship, climate, and packaging. 

If the fifth largest retailer in the world, a for-profit company like Costco, can make this level of sustainability happen (in an organization with a supply chain as large as theirs), any company can. As with so many things, sometimes it just takes one leader to get the ball rolling.