Environmental Impacts
& Land Stewardship

We want to work with suppliers and others to support good land stewardship practices that also respect the autonomy and property rights of the landowner; are outcome-based rather than prescriptive; and respect the ability of rural people and their communities to thrive while serving as stewards of the land. Good land stewardship practices include, but are not limited to:

• avoiding deforestation and conversion of natural ecosystems;
• conserving or restoring natural ecosystems;
• protecting High Conservation Value (HCV) and High Carbon Stock (HCS) forests;
• ensuring free, prior and informed consent of indigenous people;
• respecting basic human rights;
• avoiding pollution;
• protecting water resources;
• protecting from harmful chemicals;
• protecting, restoring, and promoting soil health; and
• supporting the increased healthy production-efficiency of lands currently in production.

We understand there are many differing perspectives on how to best protect these natural ecosystems; plus they are complex, with many stakeholders of varying cultures, viewpoints and land conservation practices. It will take a phased approach of continuous improvement over time to reach these goals. We cannot do this alone and will depend upon the insight, experience, and wisdom of our suppliers, scientists, and other experts. We also acknowledge that as we learn more, our goals may change.

FOREST CONSERVATION COMMITMENT

Introduction

Costco understands that it has a responsibility to source its products in a way that is respectful to the environment and to the people associated with that environment. Our goal is to help provide a net positive impact for communities in commodity-producing landscapes, by doing our part to help reduce the loss of natural forests and other high conservation value natural ecosystems. Deforestation is occurring at a rapid rate due to the conversion of natural forest landscapes to land used for growing livestock and agriculture. These natural ecosystems provide high environmental and social value, including habitat for diverse animal species, carbon sinks, and long-term livelihoods for human populations living in and near these forests.

We believe that our most impactful first steps to help support good forest stewardship practices and to protect forests are to (1) source our wood, paper, and fiber-based products from responsibly managed and certified forests, and (2) use recycled content and alternative fibers when feasible. While we desire all products to be sourced this way and encourage our suppliers to follow this goal, we have focused our efforts on our Kirkland Signature™ products. In FY2020, we published our Forest Conservation Commitment. We have further refined and updated it as stated herein.

Certified Fiber

Costco currently accepts forest management certifications from three leading organizations: Forest Stewardship Council^® (FSC)¹, Sustainable Forestry Initiative (SFI) or Programme for the Endorsement of Forest Certification (PEFC), with a preference for FSC. The certification is dependent upon numerous factors, some of which include the currently available supply for each product, the geographic origin of the product and the country where the product is produced. These certifications help to ensure that the needs of the forest ecosystems and their communities are balanced with conservation of our forests for future generations.

Recycled Content

Virgin fibers and recycled fibers interact to create a mutually beneficial fiber cycle that meets a wide range of quality needs for products. Fiber products are not infinitely recyclable – after about seven times they degrade, lose their strength and are no longer usable. This is why virgin fibers have an important role in the cycle. Virgin fibers are valued for products that require their strength, softness, color and absorbance qualities, such as premium bath tissue. To reduce our use of virgin fiber, we will maintain a preference for recycled fiber where feasible and where we believe it is a more sustainable alternative to virgin fiber. The final choice of fiber will be determined by quality and food safety requirements, product specification and performance, and legal requirements.

Recycled fibers, in contrast, are great for making such things as cardboard and packaging, which don’t require as much softness or absorbency. The production of cardboard and packaging use recycled fibers more efficiently than tissue production because fewer fibers fall through and end up as waste.

Responsible forest management is an important component in sourcing fiber for paper-based packaging. Costco remains committed to sourcing the fiber used for its products and packaging to come from known sources, be legally harvested under certified forest management programs and not contribute to deforestation or degradation. A major focus for Costco is to bring more recycled content into packaging, especially with Kirkland Signature™ products, where our company has the most influence.

Key Commodities

We are committed to eliminating deforestation in five key commodities in our Kirkland Signature supply chains that contribute to deforestation: palm oil, wood/pulp/paper, soy, cocoa and beef. In addition to updating our progress on our Sustainability Commitment Updates we also intend to publicly report using CDP Forest by 2022 or before.

Palm Oil

Costco is a member of the Roundtable on Sustainable Palm Oil (RSPO) and is committed to ensuring that the palm oil, palm kernel oil, palm kernel expeller, and other palm-based derivatives and fractions (“palm oil”) contained in Kirkland Signature™ products are responsibly sourced.

Our goal is that all palm oil used in Kirkland Signature products globally will be 100% RSPO certified (or equivalent) by December 31, 2021, or sooner, with a preference for mass balance, segregated or identity preserved. As of 2020, 97% of our palm oil is RSPO certified.

More information can be found on the Oil, Honey & Spices product page.

Wood, Pulp & Paper

Costco remains committed to sourcing from certified forests all of its wood, pulp and paper products. Examples include:

• All teak sold at Costco is FSC 100% certified. Costco sells other FSC-certified solid wood products, including cedar wood playsets, gazebos, bee houses, outdoor furniture and pavilions.
• As of FY21 and based upon the volume of fiber used in our Kirkland Signature paper-based products in the chart below, 99.9% is certified to FSC, SFI and/or PEFC, according to supplier reports. We are working toward 100% certification that will include our Gift Tissue and Photo paper that represent 0.1% of this fiber volume. We will continue to expand the Kirkland Signature items in this chart as we develop new products.

• 99.4% of register tape used in our U.S. and Canadian warehouses is FSC-certified and is also phenol-free (no BPA or BPS). We are working to expand that to warehouses and gas stations worldwide. Japanese gas station receipts now use fiber from FSC certified sources, according to supplier reports. More information can be found on our Chemical Management page.
• In the U.S., according to supplier reports, the paper used for The Costco Connection magazine, Costco.com mailer, Business Savings Event mailer, Costco Services magazine, Holiday Savings Guide, Costco Travel Guide to Savings, and Costco Auto Program Show caseliers are certified to FSC or SFI standards. The U.S. Multivendor Mailers use fiber from FSC certified sources, although there is no certification claim on it.
• In Canada, the Costco Connection magazine, Wellness flier, and Costco.ca insert are certified to the FSC standard, according to supplier reports.
• Our U.S. warehouse pharmacy transitioned to member bags with FSC-certified recycled content.

More information can be found on the Wood, Pulp & Paper product page.

Soy

Costco understands that soy is a major driver of tropical deforestation in countries such as Brazil. For that reason and others, Costco will continue to source Kirkland Signature™ soy-based products, such as Kirkland Signature soybean oil, vegetable oil and organic soy beverages, from the U.S. and Canada.

More information can be found on the Oil, Honey & Spices product page and the Eggs, Dairy & Plant-Based Beverage Alternatives page.

Cocoa

Costco will continue to support efforts to eliminate deforestation in cocoa production. We are aware that the Côte d’Ivoire has lost 80% of its forests in the last 50 years and that cocoa production is one of the drivers of that loss. The majority of cocoa sourced for Kirkland Signature chocolate products is from Costco’s Sassandra Cocoa program, located in the Côte d’Ivoire. Costco continues to fund the distribution and replanting of trees to facilitate reforestation and agroforestry efforts, for a total of 153,000 trees to date. Our goal is for 100% of cocoa farmers in the program to have their farms GPS polygon mapped for monitoring. This is done to ensure the farms are not located in protected forests and to help preserve these forests from any further encroachment. We increased the number of farmers in the program by more than 25% this year and our partners worked quickly to polygon map their farms. As of September 2021, 100% of farmers are registered and 87% of the farms have been polygon mapped.

This program has implemented the following to reduce the risk of deforestation:

• In the past, 1.1 million hybrid high-yielding cocoa seedlings have been distributed, enabling 2,100 farmers to replant a total of 1,100 hectares.
• To date, over 153,000 forest and shade trees have been distributed.
• Farmers and cooperatives were asked to choose among the varieties of shade trees offered. We provided trees that service multiple purposes. Some provide fruit or medicine, while others provide natural nitrogen fixing properties to lessen the need for synthetic fertilizer. The preferred trees by farmers this season were Cedrela, Frake and Akpi.

More information can be found on the Cocoa, Coffee & Coconut product page and Côte d’Ivoire Report.

Beef

There are concerns that beef production contributes to tropical deforestation in countries such as Argentina, Brazil, Colombia and Paraguay. We notified suppliers that our Kirkland Signature™ items containing beef should not come from these regions. This includes beef sold in our fresh meat cases. We conduct surveys with our suppliers to confirm compliance.

According to supplier reports for FY21, over 88% of the beef in Kirkland Signature items came from the U.S., Canada and New Zealand. From these reports, we identified one ground beef item being sold in one region that contained less than 1 percent of Argentine beef. We are working with our supplier to address this issue.

Our ongoing intent is not to source beef from high-risk deforestation regions until comprehensive traceability and monitoring systems are in place.

Costco is a member of the U.S. Roundtable of Sustainable Beef, and the Canadian Roundtable of Sustainable Beef, and engages with the Australian Beef Sustainability Framework. These multi stakeholder organizations facilitate the system-level change that is needed to address many of our environmental concerns.

More information can be found on the Protein & Plant-Based Alternatives product page.

POLLINATOR HEALTH & CHEMICAL REDUCTION

Pollinator health is a complex issue, which we are addressing in numerous ways. We understand that the native pollinators and managed honeybee populations are declining due to pests, pathogens, pesticides, and poor nutrition. These pollinators are necessary for pollinating approximately one-third of the food we eat, including many fruits, nuts and vegetables. More information can be found in our 2019 July Costco Connection article, Honeybee Health.

Research Support

We have invested over $6.5 million for honey bee research, putting natural forage back on the landscape, and best practices improvements with Project Apis m. in the U.S. and Canada. Project Apis m. and Costco are supporting a multi-year project to study honey bee and native bee interactions, to increase the science in this area, and to learn more about how to improve and manage habitat for the benefit of many bee species.

More information can be found on the Project Apis m. Blog and on the Oils, Honey & Spices product page.

Pollinator Friendly Agricultural Practices

We work with our fresh produce and almond suppliers to encourage the planting of buffer zones to benefit pollinators. We also encourage almond growers to use cover crops to increase the density, diversity and duration of bee forage in California orchards, which also improves soil health.

The seed mixes available through the Seeds for Bees program of Project Apis m. that we support are designed to provide multiple benefits to managed honey bees, native pollinators and crops. Some mixes bloom at critical times of the year when natural forage is scarce, but when managed bees are active. Seeds for Bees serves the needs of beekeepers and growers while increasing sustainability and biodiversity. In 2019, Seeds for Bees also developed a Western monarch habitat seed mix to address the dwindling Western Monarch Butterfly population. From 2013 to 2021, the Seeds for Bees program planted over 51,400 acres of cover crops in California.

In the Midwest of the US, a critical area where efforts are focused to support honey production, pollination, and native pollinators, we started working with The Bee and Butterfly Habitat Fund’s Seed A Legacy Program. In 2020-21 this has resulted in 132 acres of pollinator habitat, 66 Monarch Butterfly mixture acres and 536,514 milkweed seeds.

In Brazil, where our Kirkland Signature^™ Organic Raw Honey is sourced, we support Casa Apis’ efforts to plant drought-tolerant native trees in Brazil. Casa Apis is a cooperative of over 700 small-scale beekeepers in Northeastern Brazil. As of August 2021, a total of 15,860 trees have been planted and and their goal over the next five years is to plant over 200,000 seedlings across 740 acres of land to support the entire beekeeping population in the area.

Read more about Casa Apis efforts in this Trees for Bees write-up.

Chemical Use Reduction

Pollinator Health Policy

The scope of our Pollinator Health Policy includes suppliers of live goods (garden plants), fruit and vegetables. Costco encourages them to limit the use of non-essential chemicals, to utilize eco-friendly methods of pest and disease control, and to incorporate Integrated Pest Management (IPM) strategies and other creative solutions for the use of least toxic alternatives. Suppliers are encouraged to phase out the use of neonicotinoids and chlorpyrifos, unless mandated otherwise by law and when possible to avoid regrettable substitutions. Costco seeks to partner with suppliers that share our commitment to pollinator health and IPM, and make reasonable progress in a timely manner.

Progress Update

Our suppliers share our concern to minimize chemical use and have been phasing out the use of neonicotinoids and chlorpyrifos. We remain committed to working with our suppliers to phase out harmful chemicals. For FY21, we have expanded our grower survey to include our other selling regions and we also inquired about glyphosate as well as all organophosphates, not just chlorpyrifos. Below is a summary of our progress for live goods and cut flowers based on supplier reports:

• Live Goods: In FY21, we conducted a follow-up survey to U.S. live goods suppliers to determine their use of neonicotinoids since our last survey of 2021. As of FY21, 75% of our suppliers have moved away from using neonicotinoids, which is an increase from 70% in FY20. Sixty-nine percent of the remaining suppliers still using neonicotinoids reported that they’ve reduced usage. For FY21, 84% of U.S. live goods suppliers reported that they don’t use any organophosphates and 76% said they don’t use glyphosate.
• Fresh Flowers: In FY21, we surveyed our U.S. fresh flower suppliers and learned that 80% do not use neonicotinoids, 90% don’t use organophosphates or glyphosate. The remaining suppliers decreased their use of those chemicals.
• Roses: Many of our cut roses we sell worldwide are sourced from Colombia and Ecuador – and are certified by the Rainforest Alliance, which prohibits the use of neonicotinoids and limits the use of chlorpyrifos with risk mitigation. Our UK locations sell roses sourced from Kenya and these suppliers do not use chlorpyrifos. Instead they use integrated pest management systems, use neonicotinoids in limited situations and, since the roses are grown under cover, pollinators are further protected from exposure to neonicotinoids. More information can be found on the Organics, Greenhouse Grown & Horticulture product page.
• Canada: For Live Goods and Fresh Flowers in FY21 92% of the suppliers aren’t using neonicotinoids.
• Other practices to support pollinator health: Our global suppliers reported various efforts being done to support pollinator health and improve on farm practices such as integrated pest management (IPM); scout and monitor pest and pathogen to proactively manage their population; use of beneficial insects, biological alternatives, oils, and soaps; physically excluding plant pests by creating barriers and separations; working with extension offices and/or local government; setting aside land for pollinator habitat and planting other pollinator friendly native plants; and increasing regenerative and organic growing practices.

Equitable Food Initiative (EFI)

Costco is part of a fresh produce multi-stakeholder effort – that includes farmers, suppliers, and NGOs to improve labor practices, environmental stewardship, and food safety – for the benefit of workers, agricultural communities, businesses, and consumers.

More information can be found on the Costco Connection article, Fairness in farming, the EFI website and in our Human Rights page.

As of July 2021, 16 Costco suppliers are working with EFI on 56 certified operations employing nearly 46,237 workers. EFI Program Status:

Costco Suppliers Certified Operations Employed Workers 2020 15 41 28,600 2021 16 56 46,237

In addition to labor and food safety standards, certification also includes:

• An implemented Integrated Pest Management (IPM) plan that includes a stepped approach starting with biological controls followed by cultural, physical, and finally chemical responses.
• Application records for conventional and open fields operations to be entered into the Pesticide Risk Tool (PRT) in order to generate a risk assessment that can inform spray decisions. EFI continues to partner with The IPM Institute of North America to aggregate and analyze pesticide application records entered into the PRT.
• A written justification for each application of a highly hazardous pesticide, aligned with their IPM plan and documenting that risk management measures were implemented during application.
• Irrigation practices that limit erosion, and uncultivated buffer strips to further protect water habitats
• Worker training for appropriate pesticide use, and the importance of respecting reentry intervals, which also prohibits off-label pesticide use; providing to all workers personal protective equipment (PPE) free of charge; reporting to EFI leadership the name, date, and location of all applications; and medical monitoring of workers handling organophosphate or carbamate pesticides.

Expanded Product Selection

Almond Beverage:

Silk^® recently unveiled its first lineup of Bee Better Certified almond milk products available exclusively at Costco. The Bee Better Certification applies to Silk’s line of organic products sold at Costco including original, unsweetened, and unsweetened vanilla products, and represents a verified achievement to make almond farms better for bees. Almond farms certified to the Bee Better standard have planted habitat to provide food and shelter to bees, and promote integrated pest management practices that are safer for bees.

Read more about this product in our Silk Brand Showcase and in this article, Bee Better Certified: One Acre At A Time.

Weed & Insect Control Products

• Costco now sells a number of organic and alternative gardening products, which contain natural and/or organic elements.
• Globally, we no longer offer weed and insect control products containing glyphosate, neonicotinoids or chlorpyrifos.
• Since 2018, we have sold various Bee Houses, including bee houses that support native pollinators, allowing our members an opportunity to also support pollinator health in their own home garden areas.

Organics and Greenhouses

We continue to expand our selection of organic products and have increased products grown in greenhouses, which in turn supports pollinator health. Costco’s selection of organic products in FY21 continued to grow worldwide to meet our members’ demands, with organic comprising 33% of our fresh produce sales.

For more information, please see our Organics, Greenhouse Grown & Horticulture product page.

CONSERVING & RESTORING NATURAL ECOSYSTEMS

Regenerative Agriculture

Costco believes protecting and regenerating nature is imperative and the right thing to do. We strongly encourage our suppliers to follow the principles of regenerative agriculture, which include practices that minimize soil disturbance, increase plant diversity, keep living roots in the ground year-round, keep soils covered and integrate animals back onto the land. These principles help create healthier soil. Healthy soils are critical to long-term agricultural production because they reduce plant vulnerability, can improve crop production and can improve farm profitability. Increasing the organic matter in soil helps the land hold and retain more water which is critical in times of drought or excessive rainfall.

Northern Great Plains Preservation

Costco recognizes that one of the greatest threats to native grasslands or prairies is the conversion to cropland. We also recognize that responsible beef production can be linked to the preservation of native grasslands in places like the Northern Great Plains of the U.S. (NGP), where the intact grassland ecosystem is compatible with responsible cattle grazing.

Costco partnered with the World Wildlife Fund (WWF) and others to help protect the NGP intact grassland ecosystem and to test the U.S. Roundtable for Sustainable Beef’s (USRSB) sustainability framework to ensure it is useful and practical for cow-calf producers in the NGP. This program partnership has since concluded and we learned valuable lessons to apply in our future rancher engagements.

Responsible grazing maintains the health of grasslands, improves soil quality with manure, and preserves open space and wildlife habitat. Additionally, carbon is sequestered in the grasses and soils of grazing lands that are properly managed. Beef production also provides social benefits by sustaining livelihoods and community vibrancy in rural areas where grasslands dominate. Keeping NGP as grasslands not only helps conserve biodiversity, but it also means cleaner streams, less fertilizer runoff, more pollinators for plants and more carbon stored in the soil. For more information, please visit our Protein & Plant-Based Alternatives product page.

¹Costco’s FSC license code FSC-N003307