Costco earned a letter grade of C-, significantly improved from an F in 2016, scoring 43 out of 135 possible points and ranking 9th among 30 retailers. The company has made significant progress in improving its work on chemicals. In October 2017, Costco announced their new Chemical Management Policy which “goes beyond the boundaries of regulatory compliance in an effort to reduce potential chemical harm to humans and to the environment from the product manufacturing process and from consumer use and disposal.” The company encourages suppliers to, ” 1) Identify chemicals of concern (utilizing comprehensive testing programs); 2) Remove or apply the process of informed substitution for any identified chemicals of concern; 3) Identify ways to change their manufacturing processes to reduce hazardous chemical use; and 4) review qualified third-party green certifications.” This builds on Costco’s Smart Screening Program, announced earlier in the year, which ” identifies and removes chemicals of concern in multiple product categories, including chemicals not yet restricted by laws.” In 2017 Costco announced a new partnership with the University of California’s Berkeley Center for Green Chemistry to identify ways to improve their chemical management program, beginning with a focus on three product areas: furniture, textiles, and personal care and household products.
Opportunities for improvement: Costco can continue to make progress by fully disclosing their restricted substance lists by product category, and setting public quantifiable goals with clear timelines for reducing and eliminating chemicals of high concern. Costco should become a signatory to the Chemical Footprint Project and pilot it with key private label suppliers.
Summary of Costco’s Grade
6 out of 15 points
Policy: Adopted a retailer safer chemicals policy
“Costco has developed “chemicals of concern” and “restricted substance list(s)” for multiple product categories including “children’s and adult apparel, bedding, home goods, pet beds, furniture, personal care products, cleaning products, Kirkland Signature food packaging, Kirkland Signature Baby Wipes, and Kirkland Signature Diapers.”
Costco has not set public quantifiable goals for reducing and eliminating CHCs, does not have a publicly available Manufacturing Restricted Substance List (MRSL), and the policy does not appear to apply to operations.
2.5 out of 10 points
Oversight: Established management responsibilities and incentives
It is not clear if the chemical policy is included in job descriptions, if the board is engaged in the chemical policy, or if there are financial incentives for senior management to implement safer chemical policies.
7.5 out of 10 points
Accountability: Ensures supply chain accountability
Children’s and adult apparel, bedding, home goods, pet beds, furniture, personal care products, cleaning products, Kirkland Signature food packaging, Kirkland Signature Baby Wipes, and Kirkland Signature Diapers are physically tested against a list of over 300 COCs. The company intends to add more product categories over time.
The company provides training for suppliers: “For each new product category introduced to the program, Costco trains its International buyers and suppliers around the world on the processes and expectations for the packaging and the product.”
Costco has otherwise not reported on programs to audit suppliers.
0 out of 10 points
Disclosure: Requires suppliers to report use of chemicals in products to retailer
0 out of 15 points
Action: Reduced or eliminated chemicals of high concern within the last three years
4 out of 10 points
Safer Alternatives: Evaluates safer alternatives, avoids regrettable substitutes
5 out of 15 points
Transparency: Demonstrates a commitment to transparency and public disclosure
Costco does not appear to encourage or require the disclosure of ingredients in products sold online or on product packaging or publicly disclose the identity of articles or formulated products that are free of chemicals of high concern going beyond regulatory compliance.
0 out of 7.5 points
Chemical Footprint: Evaluates its chemical footprint
3 out of 7.5 points
Third-party Standards: Promotes credible third party standards for safer products
0 out of 5 points
Joint Announcement: Public commitment demonstrated through joint announcement
10 out of 15 points
Continuous Improvement: Shows continuous improvement by steadily expanding safer chemicals policy
0 out of 5 points
Safer Products: Program to promote safer products in stores and/or on website
5 out of 5 points
Collaboration: Actively participates in collaborative process to promote safer chemicals
0 out of 5 points
Impact Investment: Investing financial resources into independent research into safer alternatives and/or green chemistry solutions