Climate and Energy
We recognize that companies can and must play a significant role in helping mitigate the impacts of climate change.
Ross has established a target to reduce our Scope 1 and 2 GHG emissions per square foot by 30 percent by 2025 against a 2017 baseline. As of 2022, we have reduced our emissions intensity by 23 percent.
In 2021, we announced our ambition to be at net-zero emissions by 2050 or sooner. In support of this ambition, we developed a target to reduce our absolute Scope 1 and 2 emissions by 42% by 2030 against a 2021 baseline. This science-aligned interim target is consistent with the United Nations’ Paris Agreement guidelines and aligns with an emissions pathway intended to limit global warming to 1.5 degrees Celsius. In addition, in 2022, we explored Ross’ carbon reduction pathways for emissions from our own operations as well as our indirect Scope 3 emissions.
We continued our commitment to transparency by submitting the CDP Climate Change Questionnaire in 2022, receiving a B on our submission for the third consecutive year. We responded to CDP again in 2023, and our response includes our 2022 GHG inventory, as well as detailed information about our climate-related risks, opportunities, strategies, and management.
Ross continues to assess the risks and opportunities presented by climate change. As a Company that was founded and is headquartered in California, we are conscious of the threat posed by the increased prevalence of wildfires. In addition, we have Stores and operations across the United States and in Guam and are susceptible to extreme weather events that have been intensified by climate change, such as hurricanes and floods. These direct physical risks, along with other physical and transition risks impacting our direct operations and global supply chain, are likely to become more severe as the planet continues to warm.
To further our understanding of the future impacts of climate change on our business, we are performing a TCFD-aligned climate-related scenario analysis. Please see our 2023 CDP response for additional details on our response to climate-related risks.
Overview of GHG Emissions
On an annual basis, Ross completes a GHG accounting of our Scope 1 and 2 impacts and a measurement of certain categories of our Scope 3 impact. We are expanding our measurement capabilities to understand impacts associated with additional relevant Scope 3 categories.
Our 2022 GHG inventory was assembled in accordance with industry standards, including guidelines from the Greenhouse Gas Protocol, The Climate Registry, and the U.S. Environmental Protection Agency’s Center for Corporate Climate Leadership. Our reported 2022 GHG Scope 1, 2, and 3 emissions were also verified by a third party to assure accuracy and completeness.
GHG emissions are typically reported in terms of metric tons of carbon dioxide equivalent (MT CO2e). The intensity of our Scope 1 and 2 emissions per square foot decreased approximately 23 percent between our GHG emissions target baseline year of 2017 versus 2022.
Measurement of Scope 3 emissions is an evolving and complex undertaking. In 2022, we evaluated our Scope 3 emissions sources. We completed a high-level screening of Scope 3 emissions to start to understand which categories are relevant to our business. We plan to continue evaluating our Scope 3 emissions.
Additional details of our GHG emissions are located in the Appendix of the 2022 Corporate Social Responsibility Report.
Observed GHG Emissions and Target Progress
We endeavor to decrease our energy intensity year over year, which reduces our environmental impact and associated costs. Please see the table located in the Appendix of the 2022 Corporate Social Responsibility Report for additional details on our multi-year energy usage.
In 2022, the electricity purchased to operate our facilities represented 86 percent of our total energy consumption, as measured in megawatt hours (MWh) and gigajoules (GJ). The great majority of that purchased electricity was used to operate our Ross Dress for Less and dd’s DISCOUNTS Stores.
Because electricity consumption is such a large part of our energy usage and operational emissions, an important aspect of our GHG management strategy addresses electricity use in our buildings. Our investments in lighting, insulation, heating, ventilation, air conditioning (HVAC), and building energy management systems have enabled us to reduce electricity use. We have teams committed to finding new and better ways to achieve energy efficiency through improved processes and new technologies. We are also piloting energy audits at select locations to identify new opportunities to optimize energy use. Since 2017, we have decreased the electricity per square foot required to power our Stores, Distribution Facilities, and offices by over 15 percent.
Total Electricity Usage by Location
Supporting Electrical Grid Stability
Ross participates in demand response programs to help support local electrical grids. Through these programs, we voluntarily reduce our energy usage during peak demand times to alleviate strain on the grid and help prevent blackouts or brownouts. We reduce our electricity usage by utilizing energy management systems that are integrated with our Stores to adjust HVAC systems. By doing so, we are helping keep the lights on for our Customers and supporting the overall health and stability of the local electrical system. Ross had nearly 400 Stores participating in demand response programs in 2022, and we aim to expand our participation to more locations in 2023.
Ross has solar panels installed on the roof of select Stores. Because a majority of our Stores are leased, options to invest in on-site renewable energy generation are limited. We continue to evaluate opportunities and partnerships to pursue renewable energy in meaningful ways, including installing solar panels to generate electricity at our next Distribution Center and evaluating other opportunities for on-site solar.
Energy Efficiency: Stores
For many years, we have made investments to decrease the amount of energy used by our climate control and lighting systems, which consume most of the electricity purchased to operate our Stores.
Technologies such as LED lighting and high-efficiency HVAC units have significantly decreased the electricity required to operate these systems. We had LED lighting installed in nearly all of our Stores, and LED lighting will be installed in all of our new Stores for the foreseeable future. Additionally, we use high-efficiency HVAC units whenever possible by retrofitting existing HVAC equipment or by including them in new Store builds.
To further reduce the energy required to operate climate control and lighting systems, we utilize an advanced building energy management platform that enables more precise control over our energy management and shaves off unnecessary electricity use. This technology also allows us to quickly and easily adjust occupancy schedules, lighting levels, and temperatures across our Stores, which provides operational benefits in addition to energy savings. This system also allows for remote diagnosis of HVAC issues to quickly identify and correct inefficiencies, which can prevent unnecessary downtime and costly technician visits to our Stores. We can also quickly respond to requests to lower our electricity usage to help electric utilities avoid rolling blackouts during critical periods like heat waves. Through the use of this platform, we estimate that we have reduced energy usage at our Stores by more than 45 million kilowatt-hours from when we began piloting in 2019 through the end of 2022.
We also design our new Stores with efficiency at the center, understanding that investments in the earliest stage of Store development pay off for years to come. In addition to including LED lighting, high-efficiency HVAC equipment, and advanced energy management systems, some of our locations use thicker, higher-quality insulation than is required by code and white roofs to deflect heat. These actions result in new Stores that are more energy efficient, which lowers our energy usage, environmental impact, and costs. As we continue to add more Stores over the long term, efficient new Store design will be critical for mitigating our environmental impact.
Energy Efficiency: Distribution Centers
Ross’ distribution and warehouse facilities represent a smaller portion of our electricity consumption and, on average, use less energy per square foot to operate than do our Stores.
- We utilize an “air purging” program that uses natural air to cool our facilities. During the day, the sun heats up our buildings. At night when temperatures drop, we purge the hot air from the building and welcome in fresh, naturally cool air. This allows us to avoid several hours of air conditioning, saving energy costs. Moreover, the purging program reduces our electricity demand during peak daytime hours and therefore reduces pressure on the electrical grid.
- We use highly efficient conveyor systems with variable frequency drives, sensors, and automation that shuts off equipment when not in demand.
- We have LED lighting and sensors that shut off lights when areas of a facility are not in use. Many of our facilities also have skylights to take advantage of natural light.
- We use battery-powered forklifts and material-handling equipment to move merchandise within many of our distribution facilities. In general, this battery-operated equipment is more energy efficient and has a lower overall cost of ownership as compared to its fuel-powered counterparts.
- Our new Distribution Centers are designed with energy efficiency in mind, with white roofs to reflect sunlight and advanced building energy management systems. Our roofs are also “solar ready.”
- We are integrating solar electric power generation at a future Distribution Center.
- We performed energy audits at select Distribution Centers and identified additional opportunities to optimize energy use.
All of these approaches help our Distribution Centers reduce air pollution, limit GHG emissions, and achieve cost savings.
Energy Efficiency: Offices, Employee Commuting, and Travel
Our Corporate Headquarters in Dublin, California, achieved Leadership in Energy and Environmental Design (LEED) Gold certification from the U.S. Green Building Council, with features that increase our Associates’ comfort while minimizing our environmental impact.
The sustainability features of our headquarters include energy management equipment such as high-efficiency HVAC equipment, Energy Star appliances, and lighting with motion sensors and daylight controls. Additionally, we converted our interior and exterior lighting to LEDs.
We also enabled lower-emission transportation options by having on-site electric vehicle charging stations, providing bicycle storage and changing facilities, and locating the campus close to public transportation. We also offer programs that help our Associates to pay for public transportation using pre-tax dollars.
We support lower-carbon travel options for the field leadership organization, which supports Stores across the country. One of the key functions of our field leaders is to visit and provide direct guidance to Stores in their area, which means many of these leaders spend a lot of time on the road. To help lower the GHG impact of these visits, Ross has a corporate fleet of primarily hybrid vehicles. We estimate that we would have used over 45 percent more fuel in 2022 if our fleet contained only conventional vehicles.
Energy Efficiency: Product Transportation
Although Ross does not own the trucks, trains, and ocean vessels that transport our products, we know that the impact of transporting our products is a significant source of indirect emissions.
We work continuously with our transportation providers to improve shipping efficiency across our distribution network as we grow our business and Store base.
Some of the strategies we deployed in 2022 include:
- Shipments were consolidated whenever possible to reduce the number of trips to Stores each day.
- We shipped by rail whenever possible, which is less polluting than standard ground transportation. Approximately 32 percent of outbound freight from our Distribution Centers was shipped via rail in 2022.
- Approximately 78 percent of our transportation partners participated in the SmartWay Partnership, a U.S. Environmental Protection Agency program that improves fuel efficiency and reduces air pollution.
- The capacity of each trailer was maximized through floor loading and removing unnecessary packaging, leading to fewer shipments.
- We completed route optimization projects, which eliminate 1.9 million over-the-road miles from Store deliveries on an annual basis. We have processes in place to continue reviewing opportunities to reduce miles and routes quarterly as we grow.
- We utilized electric yard vehicles at select Distribution Centers to replace vehicles with internal combustion engines.
- We worked with international transportation partners on optimal loading of containers shipped on ocean vessels. This lowered the number of containers needed to ship our products from overseas, reducing the total number of shipments and emissions.