Costco 2007 Annual Report Download - page 14

It is our policy to sell at lower than manufacturers’ suggested retail prices. Some manufacturers
attempt to maintain the resale price of their products by refusing to sell to us or to other purchasers
that do not adhere to suggested retail prices or that otherwise sell at discounted prices. To date, we
believe that we have not been materially affected by our inability to purchase directly from such
manufacturers. Both federal and state legislation is proposed from time to time which, if enacted, would
restrict our ability to purchase goods or extend the application of laws enabling the establishment of
minimum prices. We cannot predict the effect on our business of the enactment of such federal or state
legislation.
Certain states, counties and municipalities have enacted or proposed laws and regulations that would
prevent or restrict the operations or expansion plans of certain large retailers and warehouse clubs,
including us, within their jurisdictions. We believe that, if enacted, such laws and regulations could
have a material adverse affect on our operations.
Energy Management and Conservation
As Costco continues to grow, we are mindful of our responsibilities as an environmental steward in
managing our new construction and our ongoing operations. In the Spring of 2007 we formed the
Costco Corporate Sustainability and Energy Group, comprised of individuals whose backgrounds
include Merchandising, Legal, Operations and Purchasing. This group is responsible for developing
company-wide solutions to manage the various aspects of our business most directly related to
sustainability, including data research, tracking and analysis; policy development; designing or
assisting with sustainable initiatives related to development, environmental, economic and social
concerns; employee education and training; and self-auditing of our systems.
Among the Sustainability and Energy Group’s first tasks was to evaluate the activities already in place,
including a number of programs that Costco has implemented over the years that make good business
and economic sense. Our challenge is to gather data and convert program results into a greenhouse
gas emission accounting framework using internationally accepted protocols and environmental
standards.
Greenhouse Gas Emissions and Energy Conservation To measure and monitor our greenhouse
gas emission impact we are gathering information to create a benchmark of our company-wide CO2
emissions in order to set up future key performance indicators. We, like other retailers, consume
energy; and energy conservation offers Costco one of the best opportunities to reduce our utility bills
and our greenhouse gas emissions.
In mid-1990, Costco launched initiatives to control our energy consumption and optimize our energy
efficiency through energy management systems and innovative technology. Since last year’s annual
report we have increased our installation of large-scale solar (photovoltaic) power systems from two
locations to a projected thirteen locations by this coming fiscal year-end. Ongoing, we are continually
evaluating ways to improve energy usage and reduce wasted energy.
Sustainable Development The organization, Leadership in Energy and Environmental Design
(LEED), has created a certification program that is nationally accepted as a benchmark for green
building design and construction. Our metal pre-engineered warehouse design, one of the warehouse
design styles we commonly build, is consistent with the requirements of the Silver Level LEED
Standard. Our metal building envelopes are all insulated to meet or exceed current energy code
requirements, and our main building structure is a pre-engineered system that uses 100% recycled
steel material and is designed to minimize the amount of material utilized. The roof materials used on
our metal pre-engineered warehouse are 100% recycled standing seam metal panels, designed to
maximize efficiency for spanning the structure; and the exterior skin of the building is also 100%
recycled metal.
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