Sustainability Commitment
“This Sustainability Commitment includes our updates for Fiscal Year 2020. Despite the challenges due to the COVID-19 pandemic, we have made progress on many of our sustainability commitments and goals. We would like to thank our employees, suppliers, members and the communities where we operate for their continuing support to help us navigate the challenges of the COVID-19 pandemic.” — Craig Jelinek, CEO
OVERIVEW
Our aim is that our business remains responsible, resilient and relevant in accordance with our Mission Statement and Code of Ethics.- Obey the law
- Take care of our members
- Take care of our employees
- Respect our suppliers
- Reward our shareholders
To continually provide our members with quality goods and services at the lowest possible prices.
These inform and guide our everyday goal to do the right thing and are the foundation of our business. Costco will continue to adapt as we learn more about our impact and global challenges such as climate change, human rights issues, and compromised natural resources.
- For Costco to thrive, the world needs to thrive. We are committed to doing our part to help.
- We focus on issues related to our business and where we can contribute to real, results-driven positive impact.
- We do not have all of the answers, are learning as we go and seek continuous improvement.
- Take care of our employees.
- Support the communities where our employees and members live and work.
- Operate efficiently and in an environmentally responsible manner.
- Strategically source our merchandise in a sustainable manner.
SUSTAINABILITY GOVERNANCE & EDUCATION
- Biannual reporting to our Board of Directors
- Monthly reporting to our global executive team
- Our Vice President of Global Sustainability and Compliance reports directly to our CEO and chairs our newly formed Environmental Social Governance (ESG) Executive Advisory Committee, which is made up of cross-functional leadership to help manage the integration of our sustainability policies into our current business structure
- We also keep our members and employees informed of our efforts through articles in the monthly publication, Costco Connection, and additional articles for our employees in Costco Today
- We conduct various training and educational opportunities for our employees and suppliers throughout the year, many of which are discussed throughout this Sustainability Commitment
- We provide policies and guidelines to our employees and suppliers as well as additional job aids and standard operational procedures to help our employees understand how to remain in compliance with ou policies and programs
SUSTAINABLE DEVELOPMENT GOALS (SDGs)
In FY2021 and in accordance with Point No. 1 of our 10-point Climate Action Plan, we assessed the materiality of the United Nations Sustainable Development Goals (SDGs) to create a framework for prioritizing our Climate Action Plan in relation to our business model. The SDGs are a set of 17 globally accepted 2030 goals with 169 targets that balance economic, social and environmental dimensions of sustainable development.
Following standards set by the UN Global Compact for SDG Disclosure, we conducted a materiality assessment with assistance from an outside third party to narrow down and prioritize what makes sense for our business. The assessment included:
- Undertaking preliminary scenario planning exercises
- Performing risk and opportunity assessments of operations and merchandising
- Incorporating our Code of Ethics and what “doing the right thing” means to us
- Emphasizing the importance of mapping and tracing our value chains, to learn what is actually happening on the ground and to help us help make actual positive change
- Integrating our Forest Conservation Commitment and Verisk Maplecroft materiality assessment of our key commodities
- Benchmarking against peers for industry alignment – we are comprehensive relative to our peers
As a result of this assessment, we have initially identified the following 7 UN SDGs as our priorities:
- Clean Water and Sanitation (6)
- Decent Work and Economic Growth (8)
- Reduced Inequalities (10)
- Responsible Consumption and Protection (12)
- Climate Action (13)
- Life Below Water (14) and
- Life on Land (15)
The below chart outlines these goals, our initial key performance indicators, our FY2021 baselines and where you can learn more about each SDG throughout this Sustainability Commitment.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB)
In FY2021, and in accordance with Point No. 10 of our 10-Point Climate Action Plan, we began an assessment of our ESG global reporting requirements, which included the identification of Sustainability Accounting Standards Board (SASB) topics that are material to our business. SASB develops and maintains sustainability accounting standards for 77 industries in 11 sectors, with corresponding reporting metrics to provide investors information pertaining to topics that might have a material financial impact on our company.
We identified two SASB industries most relevant to our business: Food Retailers & Distributors and Multiline; and Specialty Retailers & Distributors. With the assistance of third-party ESG Reporting consultants, we conducted a data quality risk-assessment and created information governance frameworks and procedures for select key metrics. We have identified a subset of SASB metrics for 2021 reporting. The following SASB reference table serves as a guide to our initial disclosure for this first year. We intend to expand our SASB disclosures in the coming years.
DATA SECURITY
Costco identifies and addresses data security risks based on several frameworks, including ISO27001, the NIST Cyber Security Framework (CSF), and the Payment Card Industry Data Security Standard (PCI DSS). The company’s governance policies, including the Information Security Policy, outline high level strategic information security objectives to meet compliance and regulatory requirements, and we have standards, procedures and programs to provide guidance on the management of data security risks.
Costco has implemented several technology measures, leveraging third party security providers when needed, and engages in multiple activities to identify and mitigate vulnerabilities and risks in systems (e.g., scanning for common vulnerabilities and exposures, penetration tests on internal and external networks, code scans on applications, employee awareness and training, internal and external audits). Costco also assesses the risk that third parties with whom we do business presents to Costco in an effort to reduce the likelihood of security incidents or business interruptions to our business.
Costco employs a “defense in depth” strategy to address the attack chain and safeguard our systems and information. Some of the measures utilized by Costco include phishing detection and mitigation, multi-factor authentication, information system protection systems such as anti-malware, anti-ransomware, endpoint detection and response, file integrity monitoring, and other system hardening techniques. Networks are protected using network detection and response capabilities, are segmented, and provide flow level visibility into lateral movement potential; e-commerce systems are protected by a web application firewall. This layered defense concept combined with our detection and response capabilities allow us to minimize the potential risk of unauthorized access to our systems and information.
PROGRESS
In this document, we explain how we continue to incorporate sustainable practices in our business and provide examples to help illustrate our progress. Our practices may change over time, as we learn more and adapt to our ever-changing world, and we update our Commitment to reflect these changes.
To track our progress, please review our Sustainability Commitments Archive, which provides historical versions of the Commitment only as a matter of convenience to users, who may wish to compare them over time. These historical Commitments are superseded in their entirety by the current version of the Commitment and should not be relied upon as currently accurate disclosures or otherwise.
For questions or more information, please contact Costco Customer Service.
Statements contained in this document are aspirational and relate to the manner in which the Company currently intends to conduct certain of its activities, based on its management's current plans and expectations. These statements are not promises, guarantees, or statements on which you should rely with respect to the Company's conduct or policies, and are subject to a variety of risks and uncertainties, some of which may be material and/or beyond the Company's control. In addition, certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, COVID-19 related factors and challenges, including (among others) the duration of the pandemic, the unknown long-term economic impact, reduced shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforces due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law.