Costco Wholesale

RATING

SECTOR

Retailing

WEBSITE

CONTACT

Costco Wholesale Corporation

999 Lake Drive, Issaquah, WA 98027, Seattle, Washington,

PO Box 34331, United States

T: (425) 313-8100

F: (425) 313-8103

E: costcocare@costco.com

STOCK EXCHANGE

LISTING

N/A

EMPLOYEES

254,000

ENVIRONMENTAL DIRECTOR GLOBAL SUSTAINABILITY AND COMPLIANCE

Leesah Blanchard

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Costco Wholesale

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Costco is a membership warehouse club, dedicated to bringing their members the best possible prices on quality brand-name merchandise. With hundreds of locations worldwide, Costco provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all designed to make your shopping experience a pleasurable one.

Costco Wholesale is a multi-billion dollar global retailer with warehouse club operations in eight countries. They are the recognized leader in their field, dedicated to quality in every area of their business and respected for their outstanding business ethics. Despite their large size and explosive international expansion, they continue to provide a family atmosphere in which their employees thrive and succeed. They are proud to have been named by Washington CEO Magazine as one of the top three companies to work for in the state of Washington.

Costco’s company mission statement: 

(1) identifies the company’s products/services, 

(2) specifies the buyer needs that it seeks to satisfy and the customer groups or markets it serves, and

(3) gives the company its own identity. 

Costco’s mission statement identifies with each of the rules from the beginning by defining who they are, what they do, and why they are here. A strategic objective linked to this mission statement is to develop a supply chain that supports cost minimization and high quality. Costco Wholesale has not released an official vision statement. However, the company’s history implies that its original vision statement is to be “a place where efficient buying and operating practices give members access to unmatched savings.” This implied vision statement has the following main points about Costco: Efficient operations, unmatched savings and access through membership.

Company Sustainable Activity

According to the company: 

COMMUNITIES  

“Our business is successful not only when we provide quality merchandise at a good value for our members, but also when we make a positive contribution to the health of the communities where we do business and where our employees and members live and work.”

OPERATIONS 

Costco’s sustainability commitment also focuses on managing their operation of 785 plus warehouses worldwide in an energy-efficient and environmentally responsible manner. These efforts, together with their attention to detail to find efficiencies that lower costs, use fewer resources and generate less waste, help us remain a low-cost operator, become more efficient and reduce their carbon footprint. These measures also save money on energy costs through:

Buildings:

  • Sustainable construction & landscaping
  • Energy efficiency & alternative energy

Transportation and logistic:

  • Costco understands that the more efficient they can become through our distribution systems, the better they will be able to reduce our transportation costs, reduce the number of trucks on the road and in turn, reduce our carbon emissions. They also strive to improve the efficiency of our fleets and support our employees’ efforts to reduce their transportation energy consumption.)

Waste stream management:

  • Waste diversion from landfill efficiencies
  • Cost savings & reduced emissions
  • Reducing food waste
  • Reducing non-food waste
  •  

Greenhouse gas emissions:

  • Costco is a global retailer that strives to be a responsible global citizen. They agree with the many scientists, economists and others who have concluded that global climate change is a serious environmental, economic and social challenge. It warrants an equally serious response by governments and the private sector, because global climate change impacts all of us: people, animals and plants. They want to do our part to lessen the impact and will continue to explore ways to lower their carbon footprint, source merchandise responsibly, and preserve natural resources and support alternative opportunities such as carbon sequestration.

Merchandising:

  • Costco is committed to providing their members with high-quality goods at the lowest possible price in a way that is respectful to the environment and to the people and animals that produce these goods. There are many factors that go into how we source their goods, through Kirkland signature, Human rights,  Animal Welfare,  Chemical Management, Environmental impacts and land stewardship, Packaging and Sustainable Fishering (The two primary objectives of their seafood sourcing policy are: 1. Continually source sustainable seafood products from either wild fisheries or farmed aquaculture in ways that meet current demands without compromising the availability of scarce resources for future generations. 2. Consider these factors when sourcing seafood: the condition of fish stocks (biomass); the protection of and respect for the marine, coastal, and freshwater ecosystems; governmental and regulatory agency guidelines; and practices that will mitigate or limit environmental impacts associated with aquaculture and fishing practices. As science and industry evolve, they will continue to refine these global policies.)

Certificates

  • 3 Silver LEED Certifications
  • ISO 45001
  • ISO/TC 297
  • FSC certification 
  • RSPO Certified (82%)

Sustainable Development Goals

N/A

How company covers SDGs

N/A

Progress

COMMUNITIES

According to the company: 

“Our business is successful not only when we provide quality merchandise at a good value for our members, but also when we make a positive contribution to the health of the communities where we do business and where our employees and members live and work.”

Charitable Contributions

“Costco’s commitment is to be active in our local communities. We budget 1% of pretax profits for selected charitable contributions focused on children, education, and health and human services. In fiscal year 2018, we contributed over $39 million to organizations such as United Way, Children’s Miracle Network Hospitals, Costco Scholarship Fund, disaster relief, and many programs related to education, children, and health & human services.”

“Since 2012, Costco has partnered with New Eyes for the Needy to support its Overseas Program. Costco sends members’ used eyewear and hearing aids to New Eyes where they are sorted, tested and repackaged for distribution to those in need around the world. Annual donations are approximately 260,000 used glasses and 1,800 hearing aids. Most often, the glasses are the first and only pair of eyeglasses the recipients have owned.”

Health Care

“Costco provides low-cost, quality eye care through independent optometrists and our optical departments; hearing aid services and supplies in our hearing aid centers; and prescriptions and other health-related products in our pharmacies. Costco also provides flu shots and other immunizations, health screenings, and other programs.”

“As part of Costco Health Solutions, we offer employers an alternative prescription benefit program to help them lower health care costs. Our PBM program guarantees that 100% of all discounts from manufacturers for prescriptions will be passed back to the consumer. Companies that participate in Costco’s prescription benefit program typically reduce costs by 10 to 25 percent.”

OPERATIONS 

According to the company:

“Costco’s sustainability commitment also focuses on managing our operation of 750 plus warehouses worldwide in an energy-efficient and environmentally responsible manner. These efforts, together with our attention to detail to find efficiencies that lower costs, use fewer resources and generate less waste, help us remain a low-cost operator, become more efficient and reduce our carbon footprint. These measures also save money on energy costs.”

Buildings

“To reduce the use of virgin resources, materials are selected that utilize high percentages of recycled content. 

Examples include: 

  • The prefabricated structural steel system is comprised of 80% recycled content. 
  • Costco often incorporates existing structures into its designs. 
  • Metal building insulation utilizes ECOSE® Technology, which contains an average of 76.98% recycled content. 
  • Recycled asphalt is used in some new parking lots with recycled concrete as a base material.”

“When and where it makes sense, Costco incorporates other features into its buildings to reduce the use of resources and to save money, such as: 

  • Roofs maintain a reflectance rating of .68, emittance of .25 and SRI of 63, lessening the heat gain on the roof. 
  • The erection efficiency of the structural system and envelope reduces the overall construction duration, saving time and money. 
  • High-efficiency restroom fixtures save 40% more water. 
  • Mechanical heat from refrigeration systems is captured to preheat hot water tanks.”

Transportation & Logistics

“The transportation team always looks for ways to reduce empty miles involving trucks returning to the depots from the warehouses, including: 

  • Picking up truckloads of merchandise that are destined for a Costco depot for distribution to a regional group of warehouses. 
  • Loading trailers with returned goods that are headed to salvagers or need to be returned to the supplier, and consolidating those shipments into truckloads. 
  • Growing the program with World Vision to donate many of these goods to communities in need worldwide.”

Waste Stream Management

“By diverting waste, Costco reduces the amount of trips to the landfill, fuel consumption and Greenhouse Gas (GHG) emissions. Diversion also saves money by eliminating the costs of hauling and the tonnage fees associated with less waste. Costco continues to examine waste disposal programs to maximize efficiency and to reduce costs. For example, Costco uses Wastenet™ to monitor waste pickup, where applicable. Costco has been able to reduce its hauls by 8% in those locations using this service. This ensures that compactors are hauled full.

Examples of waste management diversion programs include donation, recycling and waste to energy programs.”

“Much of our organic waste (inedible food waste) is now recycled into usable products, such as organic fertilizer, compost, animal feed, biofuels and electricity. In the U.S. for fiscal year 2018, we diverted over 80.5 million pounds of material from landfills. 

For example: 

  • 8.7 million pounds of organic waste was converted into animal feed for cattle and hogs
  • 7.3 million pounds of chicken grease produced from rotisserie chickens was recycled, the majority of which was converted into biofuel”

GreenHouse Gas Emissions

“We continue to work toward maintaining our carbon footprint growth to less than our company sales growth. For the reporting period of 2017, we achieved that goal”

“Purchased electricity for the company is the largest source of our carbon emissions and represents a significant expense. 

By reducing energy usage directly, our emissions and energy expenses will be reduced. Some examples: 

  • In Japan, we have upgraded our lighting systems. The Kanazawa Seaside location received an award from the Yokohama City government for reducing CO2 emission by 300 cubic tons, which exceeds 10% savings; and 
  • We reduce emissions by purchasing renewable energy and continuing to use solar panels on new locations

MERCHANDISING 

According to the company,

“Costco is committed to providing our members with high-quality goods at the lowest possible price in a way that is respectful to the environment and to the people and animals that produce these goods. There are many factors that go into how we source our goods.”

“While a majority of our merchandise is branded, Costco created a line of exclusive private-label products called Kirkland Signature . In developing Kirkland Signature products, we have the unique opportunity to have better control over the entire supply chain, including where the product comes from and under what conditions it is produced.”

Paper Products

“Our goal is to have all Kirkland Signature paper products certified from wellmanaged forests. Many Costco paper products have been certified for some time and others are converting. Some examples include: 

  • 95% of Kirkland Signature Bath Tissue, Facial Tissue, Paper Towels and Napkins sold worldwide are FSC, PEFC or SFI certified. 
  • 100% of Kirkland Signature Parchment Paper sold worldwide is FSC certified. 
  • 100% of Kirkland Signature Gift Wrapping Paper sold worldwide is FSC certified.”

Costco Wholesale communicate greatly about their commitment to sustainability. They provide clear targets, and some progress backed up by KPIs.  Unfortunately, even if they hold some certificate to recognize their commitment they are lacking primary certificates, ranking and awards.  On top, their missing commitment to SDGs and some scandal over the last decade bring them to be rated as a D. 

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