Emissions and Energy
As the planet, our business, our Associates, and our Customers continue to feel the impact of climate change, we recognize that companies can and must play a significant role in helping mitigate its impacts.
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 Guam and have felt the impact of extreme weather events that have been intensified by climate change, such as floods, heat waves, hurricanes, and winter storms. These direct physical risks, along with many others, will only become more severe as the planet continues to warm.
Our response to climate change is organized into three action areas: increasing efficiency, building resiliency, and lowering our impact. This section outlines our years of work in these areas.
Ross established a target to reduce our Scope 1 and 2 GHG emissions per square foot by 30 percent by 2025 against a 2017 baseline. Although in 2020 we experienced a reduction of 29 percent in emissions per square foot against this baseline, these results were influenced by operational challenges due to the ongoing COVID-19 pandemic, which resulted in a temporary reduction in our absolute GHG emissions. After considering these factors, we believe that our reduction in emissions per square foot against our 2017 baseline would have been approximately 23 percent, which is ahead of the pathway to achieve our target.
We also increased our commitment to transparency by submitting to the CDP Climate Change Questionnaire for the first time in 2020, receiving a B on our submission. We responded to CDP again in 2021, and our response includes our 2020 GHG footprint, as well as detailed information about our climate-related risks, opportunities, strategies, and management.
GHG Emissions Inventory Details
This section pertains to the GHG accounting of our Scope 1 and 2 impact and a limited measurement of our Scope 3 impact. A table summarizing our multi-year GHG emissions is provided on page 36 of the 2020 Corporate Social Responsibility Report.
We plan to continue expanding our measurement capabilities to further understand additional relevant Scope 3 categories.
Our 2020 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 2020 GHG Scope 1, 2, and 3 emissions were also verified by a third party to ensure accuracy and completeness.
GHG emissions are typically reported in terms of metric tons of carbon dioxide equivalent (MT CO2e). We have organized our GHG emissions to align with the Greenhouse Gas Protocol’s scope definitions:
- Scope 1 emissions are direct GHG emissions from sources that are owned or controlled by Ross.
- Scope 2 emissions are from the generation of energy and electricity purchased by Ross.
- Scope 3 emissions are from sources not owned or controlled by Ross.
of GHG Emissions in 2020 were in Scope 1
of GHG Emissions in 2020 were in Scope 2
of GHG Emissions in 2020 were in Scope 3
Our absolute Scope 1 and 2 GHG emissions decreased approximately 15 percent between 2019 and 2020. Energy-efficiency initiatives contributed to this decrease, but a significant portion of the reduction was due to the impact of the ongoing COVID-19 pandemic. In early 2020, to prioritize the safety and well-being of our Customers and Associates and help slow the spread of COVID-19, we temporarily closed all Store locations, our Distribution Centers, and Buying and Corporate Offices. While these facilities were closed, they obviously used significantly less energy to operate and generated fewer GHG emissions.
The intensity of our Scope 1 and 2 emissions per square foot decreased approximately 18 percent between 2019 and 2020 and by 29 percent between our GHG emissions intensity baseline year of 2017 versus 2020. These results were greatly influenced by the fact that, even though we added square footage in 2020, we reduced our absolute Scope 1 and 2 GHG emissions, as mentioned above.
We endeavor to decrease our energy intensity year over year, which reduces our environmental impact and costs. A table summarizing our multi-year energy consumption by source is provided on page 37 of the 2020 Corporate Social Responsibility Report.
In 2020 the purchase of electricity to operate our facilities represented 87% 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.
of total electricity in 2020 was used in Stores
of total electricity in 2020 was used in Distribution Facilities
of total electricity in 2020 was used in Offices
Because electricity consumption is such a large part of our energy usage and emissions, an important aspect of our GHG management strategy addresses electricity use in our buildings. Our investments in lighting; insulation; heating, ventilation, and air conditioning (HVAC); and building energy management systems (BEMS) 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 used less energy in 2020 than in 2019. Energy efficiency initiatives contributed to the decrease, but the magnitude of this reduction was partially driven by temporary closures of our Stores, distribution facilities, and offices due to the ongoing COVID-19 pandemic.
Ross has solar panels installed on the roof of select Stores. Because a majority of our Stores are leased, however, opportunities to invest in on-site renewable energy generation are limited. We continue to evaluate opportunities to pursue renewable energy in meaningful ways.
Energy Efficiency in Stores
For many years, we have made investments to decrease energy use by 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. As of the end of 2019, we had LED lighting in nearly 100 percent of our Stores, and LED lighting will be installed in all of our new Stores for the foreseeable future. In addition, we use high-efficiency HVAC units whenever possible, through retrofitting existing HVAC equipment or including them in new Store builds.
To further reduce the energy required to operate climate control and lighting, we invested in an advanced building energy management platform that enables more precise control over our energy management and shaves off unnecessary electricity use. We piloted the system in 2019. In 2020, based on the successful outcome of that pilot, we rolled out the system to all Stores. 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.
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, we often use thicker, higher-quality insulation than is required by code and white roofs whenever possible to deflect heat. These actions ensure that our new Stores are very energy efficient, which lowers our energy usage, environmental impact, and costs.
Energy Efficiency in 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.
Highlights of our energy management program in 2020 include:
- 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, thereby saving energy costs. What’s more, the purging program reduces our electricity demand during peak daytime hours and therefore reduces pressure on the electricity 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 compared with 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.”
All of these approaches help our Distribution Centers reduce air pollution, limit GHG emissions, and achieve significant cost savings.
Energy Efficiency in Offices
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 impact on the environment.
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 locating the campus close to public transportation, having on-site electric vehicle charging stations, and providing bicycle storage and changing facilities.
Energy Efficiency in Product Transportation
Although Ross does not own its fleet of trucks, 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 Store base to 3,000 Stores.
Some of the strategies we deployed in 2020 include:
- Shipments were consolidated where possible to reduce the number of trips to Stores each day.
- We prioritize shipping by rail whenever possible, which is less polluting than standard ground transportation.
- Approximately 86 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.
- In 2018, a project to optimize the delivery routes in a number of markets resulted in a reduction of more than 1.8 million over-the-road miles, and we work to continually minimize the miles required to get products to our Stores.
Energy Efficiency in Travel
Ross has a robust field leadership organization to support Stores located 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. Through the use of hybrids, the total emissions from our corporate fleet were approximately 25 percent lower in 2020 than if we had used standard vehicles.
Like many companies, Ross had to adjust its business travel policies to prioritize the safety and well-being of our Associates during the ongoing COVID-19 pandemic. As a result, our Scope 3 emissions related to business travel were approximately 63 percent lower in 2020 than in 2019.