Costco Dives Into Product Sustainability

costco-goes-solar_5965If you’ve ever shopped at one of Costco Wholesale Corporation’s massive retail warehouses, you already know that it’s pretty much a low-tech, do-it-yourself shopping experience.

Paper or plastic is a question unasked at the checkout line; the best one can do is to opt for a recycled cardboard box that might once have contained kumquats, underwear, olive oil or detergent.

So in that respect the Issaquah, Wash., retailer has  already been taking a somewhat sustainable approach since it started business in 1983. Plus, it saves on overhead by reusing the boxes.

In its first Corporate Sustainability Report, which covers the 2007-2008 period, senior executive vice president and chief operating officer Dick DiCerchio admits that Costco’s environmental reporting “is still evolving. We recognize the need to report more environmental metrics information in future reports.”

That said, DiCerchio notes Costco “has always supported the environment with many innovative practices since our beginning,” including skylights, metal energy-efficient buildings, reuse of boxes instead of bags, limits on packaging from suppliers, carpooling, initiatives in solar, the use of recyclable plastics instead of PVC and even a reduction of clam shells.

In 2007 it formed the Costco Corporate Sustainability and Energy Group, spearheading the development and implementation of energy policy and sustainably sourced products strategies.

Powering Sustainability
Costco’s energy policy includes a program to reduce greenhouse gas emissions through energy-efficiency measures.

Costco found that purchased electricity comprised 84 percent of its carbon footprint in 2007. Its energy program puts special emphasis on energy-efficient building designs and operations. Other elements of the program include the installation of photovoltaic solar panels on warehouse roofs “where location and energy incentive programs indicate,” such as at its Kona, Hawaii warehouse.

The company reports that by August of 2008 it had installed 14 large-scale pilot photovoltaic power systems in California and Hawaii with a combined output of about 7 megawatts. Five more systems were installed by the end of 2008.

Other elements of the program include the extensive use of “daylight harvesting” and energy-efficient equipment, construction of warehouses that exceed local energy codes.

It is also working to minimize the number of deliveries by consolidating freight at company distribution centers and maximizing the load that each truck carries.

Costco says that its baseline specifications for parking and exterior building lighting will be redesigned to achieve a 15 percent reduction in their power requirements. It is also redesigning its lighting management system in order to increase the time period between lamp change-outs by nearly 50 percent.

The company’s “sustainably sourced products” strategy stresses products “from a supply chain that are economically, environmentally and socially sustainable.”

It says it is working with suppliers to “preserve and improve” resources for its products while improving the livelihoods of the producers and minimizing environmental impacts.

Sustainable Seafood
Sustainably sourced seafood is a huge issue in the Pacific Northwest and access to wild Alaskan seafood gives Costco buyers in the region a big advantage over other retailers. The company’s sourcing of Alaska seafood has grown to include wild salmon, halibut, king crab legs, Dungeness, cod, black cod and rockfish.

An Alaska sustainability summit in 2007 helped to define Costco’s objectives and strategy for sustainably sourced seafood purchasing.

The strategy includes using wild or farmed sources that “can be managed in ways that meet current needs without compromising availability of scarce resources for future generations.”

It addition Costco says it must consider the condition of fish stocks, protection of the marine ecosystem, governmental and regulatory agency guidelines and best management practices that will mitigate or limit environmental impacts associated with farmed aquaculture sources. The company is “exploring” international principles covering responsible shrimp and tilapia farming.

It is also sourcing its coffee from fair trade certified producers and flowers from Rainforest Alliance Certified farms.

The first report is a good first step for the eighth largest retailer in the world, the fifth largest in the U.S., and its 543 warehouses worldwide. But the company is still in the early stages of tracking its greenhouse gas emissions so that it can set realistic reduction targets. It only began tracking systematically its refrigerant use in the U.S. and Canada last year. Next up: working the metrics.

writer, editor, reader and general good (ok mostly good, well sometimes good) guy trying to get by

4 responses

  1. It’s really encouraging to see Costco taking a conscious stand on sustainable seafood. It’s painful walking through the frozen seafood section seeing farmed salmon products, orange roughy, and shrimp, knowing that Costco buys and sells in such high volumes. They definitely have some sustainable offerings as well, but most consumers can’t distinguish between good and harmful seafood choices. For this reason, it’s important that retailers help screen out decline species.

  2. Costco’s sustainability efforts and reporting are a great step in the right direction. However, it is difficult to reconcile this with its recent decision to remove charging stations for electric cars. While there is a subtle distinction between sustainable business practices in their immediate operations and providing services supporting environmentally-friendly practices generally, this contradiction doesn’t sit well. As long as their costs are mitigated by incentives, why shouldn’t their objectives include things like caring about the environment more broadly?

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