Costco doing the right thing for people, planet
Costco doing the right thing for people, planet
Costco’s approach to sustainability is holistic and integrated throughout the company based upon three fundamental company foundations. First, Costco’s code of ethics provides the core operating tenet of doing the right thing and helps focus sustainability solutions to be operationally viable and fulfill its obligations to their shareholders, employees, members, suppliers and the communities they serve while obeying the law.
Second, Costco’s sustainability initiatives support its mission statement to provide its members with quality goods and services at the lowest possible prices.
Third, the sustainability principles, aligned with the UN Sustainable Development Goals, recognize that in order for Costco to thrive, the world must thrive, and they are learning as they go, seeking continuous improvement.
“Our philosophy is to meet our suppliers where they are and together work for continuous improvement,” said Bob Huskey, vice president of produce. “We do not ask more of our suppliers than we do of ourselves.”
As it relates to merchandising, Costco has developed six questions for its suppliers to keep focused and provide guidance:
• Can you map your supply chain (the foundation to answer the remaining questions)?
• How are people treated?
• How are animals treated?
• How is nature/biodiversity treated (with an emphasis on water, forestry and fisheries)?
• Is the best possible packaging being used?
• What are your emissions and plans to reduce them?
As a global retailer, Costco acknowledges the direct and indirect impacts on human rights and are dedicated to continually improving their own human rights practices and those of their suppliers. “Ensuring that the workers in our supply chain are treated fairly and with respect is an imperative,” said Huskey. “Costco’s produce business is only as strong as its supply chain, so it’s in our best interest to work with our suppliers and set expectations to better ensure the strongest possible supply chain for the future.”
Costco also puts a lot of value on workers’ rights. “Protecting the rights of workers in our supply chain is critically important to Costco,” said Preston Witt, AGMM of human rights and code of conduct. “With regard to fresh produce, we are among the largest retail supporters of the Equitable Food Initiative and Fair Trade USA, which are certification programs that directly engage with and empower farmworkers. To date, Costco has contributed over $50 million in premium payments for certified products between these two programs, which benefit farmworkers in a variety of ways.”
Costco also helped develop the fresh produce industry’s Ethical Charter on Responsible Labor Practices and now plays a leadership role on the Advisory Group to the Ethical Charter Implementation Program. This program involves an interactive web-based platform for growers and suppliers to assess their labor management systems against the principles of the Ethical Charter and receive guidance on how to strengthen areas where they may not be aligned. The ECIP platform then allows buying organizations, like Costco, to monitor growers’ and suppliers’ engagement with the program.
“We have an emphasis on learning and continuous improvement with our sustainability program, we expect the same of our suppliers when it comes to human rights,” said Huskey.
The produce industry has an impactful opportunity to protect nature/biodiversity through good farming practices that include pollinator health and integrated pest management programs, certified programs that prevent deforestation and regenerative agricultural practices that promote soil health, smart water use, carbon sequestration and biodiversity.
“Given my background in both meat and produce, I find the concept of regenerative agriculture intriguing,” said Huskey. “It will take a lot of planning and strong relationships to scale this up, but since we sell a multitude of products across the many departments in our warehouses, we have a better opportunity for success.”
The climate is also top of mind at Costco. The company recognizes the opportunity to decarbonize its global operations — from its warehouses to its depots. Costco has committed to an ambitious Scope 1 and Scope 2 emission reduction target: 39 percent absolute reduction by 2030 compared to their 2020 base year. It has committed to operate with 100 percent clean energy sources by 2035.
Costco is committed to doing its part to reduce emissions and improve the resilience of its supply chain. Scope 3 emissions, unlike Scope 1 and 2, are outside of Costco’s direct control. Costco will require the support and help of its suppliers to meet its goal of a 20 percent intensity Scope 3 emissions reduction (excluding fuel) by 2030 from a 2020 baseline. “Suppliers’ own efforts to reduce their Scope 1 and 2 emissions are critical as well as their support of Climate Smart Agriculture and certified Deforestation and Conversion Free products,” said Huskey.
