MW Target's climate pledge says some profit-churning convenience must go
Rachel Koning Beals
By 2040, the retailer wants 100% of its owned-brand products to be circular and seeks net-zero emissions across the supply chain
Target Corp. has announced environmental initiatives Tuesday that include steps within its own brands to counter the mass consumption of the toss-away products and fast fashion that has driven its big-box retail prominence, including record earnings released just last month.
As part of a rollout it's calling "Target Forward," many of the initiatives are focused on climate change and build on earlier pledges.
By 2040 Target plans for 100% of its owned-brand products to be designed for a circular future. That means Target will continue designing to eliminate waste, using materials that are regenerative, recycled or sourced sustainably, and to create products that are more durable, easily repaired or recyclable, it says. Target has 10 billion-dollar owned brands, including kids label Cat & Jack, accessories label A New Day and home brand Opalhouse. Already, circular design principles are part of its Universal Thread and Everspring lines.
By 2040, Target commits to net zero emissions across its operations. It's a pledge matching that of competitor Walmart Inc
Target's net-zero goal includes the much more challenging assertion for any consumer company: curbing Earth-warming emissions throughout a far-flung supply chain.
Research at consultants McKinsey says that more than 80% of greenhouse-gas emissions and more than 90% of the impact on land, air, water, biodiversity and geological resources sit on the supply-chain side of any large consumer company's operations. Fashion, in particular, will be a drag on the globe's push to slow global warming to 1.5 degrees .
The Target pledge includes creating zero waste to landfills in its U.S. operations. And the retailer says it has projects and partnerships in place that when complete will result in purchasing nearly 50% of its electricity from renewable sources, toward 100% by 2030.
Global consumer conglomerate UnileverUL (#phrase-company?ref=COMPANY%7CUL;onlineSignificance=significant) said it will work with outlets like Target to hit its own net-zero emissions pledge . "Carbon reduction is needed to work toward a more sustainable world for all. Unilever and our purpose-driven brands look forward to partnering with Target to help drive our industry even further in improving the health of our planet," Fabian Garcia, president of Unilever North America said.
Read:Microsoft, Unilever and a Finnish oil refiner believe Amazon has it right with climate pledge
Beyond environmental aims, Target says that by 2030, the retailer wants to build a team that equitably reflects the communities it serves, beginning with a commitment to increase Black team member representation across the company by 20% by next year.
"We know sustainability is tied to business resiliency and growth, and that our size and scale can drive change that is good for all," Target CEO Brian Cornell said.
Yet the sustainability goals come at a time when meeting consumer flexibility demands helped propel the retailer to strong results.
Target reported first-quarter adjusted earnings that reached an all-time high , easily topping Wall Street estimates on both profit and sales. Adjusted EPS at $3.69 was 525% higher than last year when COVID-19 gripped the economy. Sales totaled $23.88 billion, up from $19.37 billion last year.
Target's stock price is up 32% in the year to date and more than 90% over the past year. The S&P 500 is up 12% and 35%, comparably.
The carbon footprint that can accompany convenient pickup and quick shipping, as Target looks to compete with Amazon.com$(AMZN)$, Walmart and Costco Wholesale Corp. $(COST)$, are factors increasingly under watch when companies make pledges to combat climate change.
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Companies have come under greater pressure from customers and shareholders to align their business model with the shift to a low-carbon economy and net-zero emissions, especially in the runup to the U.N. Climate Change conference, or COP26, in Glasgow in November. Major CEO groups, including those at the Business Roundtable, have conceded that sitting out the climate-change push would be bad for operations.
Read:CEOs want SEC climate reporting separate from earnings but concede new rules are likely
-Rachel Koning Beals; 415-439-6400; AskNewswires@dowjones.com
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June 22, 2021 07:09 ET (11:09 GMT)
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