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The earth’s climate is changing rapidly, and with a more environmentally concerned population than ever, unsurprisingly because of this, lots of attention has been directed towards how big businesses such as Costco have an impact on our climate. Costco has been seen as a business innovator in sustainability reporting and annually publishes its sustainability reports publicly displaying its environmental impact. As new legislative and regulatory requirements are created, Costco will likely be almost completely unaffected as they already have publicly displayed goals of reducing electricity and gas consumption. Costco’s entire business model has been designed (whether intentional or not) grounded in an environmentally friendly way, as buying products in bulk reduces carbon emissions required in transportation tenfold.
One of the first things Costco has done in a step towards sustainability is limiting its usage of natural gas and electricity. Costco even ensures that its carbon footprint growth stays incredibly small compared to its business size by comparing its total carbon emissions directly to its sales growth, making it its mission to keep its CO2 growth lower than its sales growth. And since 2009 Costco has maintained this goal, on average having a growth of 7.9% in sales annually but only a total of 1.8% carbon emission growth. Another way Costco ensures that their business is sustainable is by how they go about lighting their sales floors, and their sustainable lighting efforts have resulted in them cutting their total electricity used by half over the past 11 years. They achieved this drop by using more energy-efficient LED lights as opposed to the regular bulbs they had previously used. Another method they have employed to lower their carbon footprint is to install solar panels on the roofs of all of their facilities. According to data they have fitted hundreds of facilities with new solar-powered systems and are planning on installing them in all of their stores and warehouses by 2020.
Furthermore, Costco also sets strict restrictions on their material usage with an innovative system of recycling grease from their rotisserie chicken which has reportedly recycled over one million pounds of grease that would have otherwise gone to waste. As the world progresses to become a more environmentally aware place, Costco will likely remain a front-runner in reporting the steps they have taken to reduce its carbon footprint and recycle materials. Compared to other aspects of business, sustainability assurance departments are expected to become almost three times as common within the next five years. And the conduct of Costco demonstrates this trend. But environmental issues are not the only issues Costco has taken a progressive view of; the company has very rigid human rights standards towards its suppliers. If human rights violations are discovered, the company has a pre-established system in place that ranges from contacting the supplier and demanding work condition changes, to an immediate termination of any business relationships.
A systematic investigation of suppliers should be compulsory for all businesses to prevent the continued mistreatment of workers. And because of Costco’s ever-vigilant policies, they have surely set the standard for other retail businesses. Furthermore, Costco is well documented for its generous working wages and its unheard-of freely provided healthcare. Whilst this may not be the most financially advantageous business model, it has lowered Costco’s turnover rates to just 5% which will have resulted in drastically dropped training and hiring costs. Another way in which Costco has reduced its environmental impact is through its plastic package design for many of its food items. Changes as simple as changing the shape of their walnut containers from a circle design to a square design have allowed for 50% more containers in each transportation load. In this case, sustainability and a cost reduction come in the same form and this way of thinking is what has allowed Costco to keep both its prices and its impact on the planet low. Costco is still making immense progress in its mission to become a world leader in business corporate social responsibility. Their strict margins on resource intake have forced them to innovate in every possible way to increase efficiency throughout all facets of the business. Costco has developed an inspiring model of sustainable energy and continues to ensure the safety and wellbeing of employees and customers alike.
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