The Home Depot plans to reduce its emissions over 50 percent by 2035, a goal the home improvement retailer said will help it cement its environmental leadership among corporations.
The company has won Energy Star recognition every year since at least 2012, received water and supply chain awards from the Environmental Protection Agency, and the company’s Vice President of Environmental Innovation Ron Jarvis says collaborating with environmental groups is a priority. But the retailer also admits it wasn't always that way.
Criticisms in the 1990s led the company to develop a strategy to both carry more energy-efficient and environmentally friendly options and label then clearly. Then certain stores began to sell wind turbines and solar panels in the 2000s. More recently, Home Depot worked to develop fuel cell systems, offsite renewables and rooftop solar projects to power its stores. Then, in 2018, the company set its goal to reduce emissions 50.4 percent by 2035.
“We see our role as a leader,” said Jarvis. “We’ve got to be ahead of everyone.”
In the past, Home Depot has mostly channeled that outlook into its products. Jarvis said 95 percent of the company’s environmental concerns center on what it sells in its approximately 2,200 stores across 1.3 billion transactions a year.
Jarvis said Home Depot has for years worked with suppliers to offer products that are more sustainable and more energy efficient, encouraging manufacturers to clean up their products and compelling customers to choose environmental options "because they couldn’t buy anything else." He referenced the company’s efforts to push mainstream retailers to reduce harmful chemicals in paints and to standardize LED lightbulb certifications across the industry.
According to Jarvis, Home Depot saved customers $1 billion in energy costs and reduced emissions by over 6 million metric tons in 2017 through energy savings. Its 2017 sales of energy-efficient products topped $5 billion.
“We can make little changes in the product categories that have a much larger impression on the world than if we search for certified and green products,” said Jarvis.
According to him, that same drive to lead influenced Home Depot’s decision to carry solar panels and wind turbines. The company now sells about $50 million worth of solar systems a year (wind turbines are less popular, but the company declined to offer specific sales figures). The store availability of those products largely depends on local and state incentives, but all new stores in California will now have panels for sale.
Jarvis said most interested solar buyers arrive to the company's stores well-informed, but the retailer also sees its role as making sure customers understand the products they’re purchasing. Many stores have a solar company representative onsite who is available to explain the installation process. Though Tesla canceled its high-profile partnership with the retailer this summer, other installers like Sunrun still sell panels through Home Depot.
And Home Depot is increasingly getting into clean energy itself. It began installing 200-kilowatt fuel cell systems at its stores in 2014 in partnership with Bloom Energy, with 198 projects now in California, New York, Connecticut and Massachusetts complete as of the end of October. The 27 projects Home Depot installed in 2018 included a new feature: battery storage.
The retailer has also set a goal to have 135 megawatts of onsite and offsite renewables capacity by 2020. The company currently has nearly 130 megawatts and expects to surpass its goal in the middle of 2019.
Those initiatives helped the company reduce its total carbon use by 640,000 metric tons last year. It decreased carbon emissions by about 10 percent while increasing revenue by nearly 8 percent.
This year Home Depot also brought on several small community solar projects in Minnesota and recently signed another wind offtake agreement for 15 megawatts in Kansas that will come online next year.
Craig D’Arcy, Home Depot’s energy director, said the company remains geographically and technologically agnostic when selecting projects. Its biggest consideration is choosing projects with a clear economic benefit, whether that’s cheaper power or shielding the company from volatile electricity prices.
“When we’re pitching these projects and getting buy-in across the company, those discussions are a lot easier because we’re trying to show up with projects that folks could feel pretty good about, even if they were just regular non-sustainability type projects,” D’Arcy said. Home Depot also focuses on projects with “material scale” that are either large or have the capacity to grow beyond a pilot phase.
In August, Bloomberg New Energy Finance reported that corporations had purchased a total of 7.2 gigawatts of renewables thus far in 2018. Home Depot's scale doesn't rival top renewables buyers like Google and Facebook. But the retailer specifically pointed out its lagging pace in deploying rooftop projects.
“We try to be early movers and shakers on all these types of projects," said D’Arcy. "This one is one where, candidly, we are not,”
A slowdown in the addition of new stores meant adding solar to aging store roofs wasn’t a wise financial choice. But D’Arcy said a recent uptick in store additions, as well as the increasingly favorable economics for rooftop systems, is pushing Home Depot into rooftop installations. Trailing behind retailers like Walmart and Target, Home Depot moved from only four rooftop projects in 2017 to a current tally of 45.
D’Arcy said the “only guardrails” for future projects — onsite and offsite — are favorable economics and making sure the company doesn’t exceed its local electricity demand with the capacity it owns.
In the next year, the company said it will be working to quantify the value of functionalities provided by its growing portfolio of clean energy and efficiency projects. In addition to fuel cells and renewables, the company also recently rolled out light retrofits at about two-thirds of its stores and upgraded its control hardware and software for lights and HVAC units.
Jarvis said those initiatives will help the retailer meet its ambitious goals to cut absolute emissions nearly 40 percent by 2030 and by over 50 percent five years later.
Despite Home Depot's framing, the company has been the target of environmental criticisms in the past. Some observers have even alleged the company's sustainability messaging amounts to greenwashing. But those protests have at times also found an ear at Home Depot; nearly two decades ago the company invested in sustainable wood practices and more recently announced it would ban toxic chemicals from certain paint products (the EPA is also currently investigating the retailer for its lead paint practices).
Jarvis said Home Depot’s transparency around emissions reporting and its outreach to both manufacturers and environmental groups is an attempt to make its business as sustainable as possible — even though the company still wants to make money.
“You shouldn’t sell as much crap, is what you should do. And as a company, we want to sell as much as we possibly can,” said Jarvis, on cutting waste in the supply chain, adding, “If we are going to sell it — let’s make sure it’s going to last longer than the rest of them.”
Other U.S. corporations have been quick to promise climate action. Coalitions like Climate Mayors, America’s Pledge on Climate, and We Are Still In — which does not include Home Depot among its signatories but does have $6.2 trillion in total economic value — have vowed to push climate action even in the absence of leadership from the federal government.
Home Depot itself has not publicly defended the agreement. But Jarvis implied the retailer’s efforts, such as energy-efficiency savings, could work faster than initiatives at the national level.
“This is almost an economic stimulus package that makes the world a better place on its own,” said Jarvis. “Think of what [it] would take to get that through legislation.”