Costco 2010 Annual Report Download - page 14

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. If enacted, such laws and regulations could have a material
adverse affect on our operations.
Intellectual Property
We believe that our trademarks, trade names, copyrights, proprietary processes, trade secrets,
patents, trade dress and similar intellectual property add significant value to our business and are
important factors in our success. We have invested significantly in the development and protection of
our well-recognized brands, including the Costco Wholesale®series of trademarks and our private
label brand, Kirkland Signature®. Kirkland Signature products are premium products offered to our
members at prices that are generally lower than those for national brand products. Kirkland Signature
products allow us to ensure our quality standards are met, while minimizing costs and differentiating
our merchandise offerings from other retailers, and to generally earn higher margins. We expect that
our private label items will increase their share of our sales in the future. We rely on trademark and
copyright law, trade secret protection, and confidentiality and license agreements with our employees
and others to protect our proprietary rights. Effective intellectual property protection may not be
available in every country in which we operate.
SUSTAINABILITY: ENERGY MANAGEMENT, CONSERVATION AND THE “GREENING” OF COSTCO
Corporate Sustainability and Energy Group We are mindful of our responsibilities as an
environmental steward in managing our new construction and the many aspects of our ongoing
operations in an energy-efficient and environmentally friendly manner. In 2007, we created the
Corporate Sustainability and Energy Group (CSEG) in our company to develop, implement and report
on our environmental management efforts. The mission of CSEG is to help Costco’s businesses
operate in an environmentally and socially responsible and sustainable manner; to reduce Costco’s
use of resources and generation of waste; and to lead by example. The group has developed solutions
to manage some 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. In January 2009, CSEG issued a Corporate Sustainability
Report, which is available, with updates, on the Costco.com website.
Greenhouse Gas Reduction Program We have implemented a corporate energy policy within an
environmental framework, supported by a program for greenhouse gas (GHG) emissions reduction. In
2007 we ceased using HCFC refrigerant, an ozone-depleting substance, in new and replacement
refrigeration systems, and in 2008 we discontinued its use in new and replacement air conditioning
systems. During this past year we completed a greenhouse gas emissions inventory for our operations
in the U.S., Canada and the UK that we believe meets standards established by the GHG Protocol
Corporate Accounting and Reporting Standard. The inventory accounts for greenhouse gasses emitted
into the atmosphere from Company activities (including direct emissions from our own energy-use
activities and indirect issues from our purchased electricity), and provides details on the methods used
to make the emissions calculations by facility on an entity-wide basis. We use this inventory to track
emission trends and to assess progress. Our goal is to measurably reduce Costco’s carbon footprint –
the amount of greenhouse gases produced directly and indirectly in our business.
12