Costco has made material commitments to engage in reduction of its greenhouse gas emissions through its Climate Action Plan (CAP).1 Targets include a 39% reduction in emissions by 2030, and 100% clean energy by 2035.2 However, not enough has been done to assure investors that such a drastic realignment of Costco towards renewable energy sources is in the best financial interest of shareholders.

McKinsey Sustainability estimates that a global transition to net zero emissions (NZE) would require $9.2 trillion dollars annually in global spending until 2050.3 This raises serious questions about the costs of achieving Costco's related goals, but Costco has apparently not disclosed how much money it is spending on its green transition, much less how its investments in NZE are providing a positive return on investment for shareholders. Instead, Costco apparently merely provides metrics on locations now running on renewables and estimated reductions in greenhouse gas emissions.4 Even investors committed to "sustainable" investing likely need accurate related cost information for proper share price valuation.

Seeing as the CAP is apparently a material investment presented by Costco without soluble financial metrics to judge it by, the CAP program may be a compelling target for anti-greenwashing action by the SEC or another interested body.

The SEC has historically targeted companies engaging in forms of greenwashing with considerable financial penalties. For example, Goldman Sachs Asset Management was fined for $4 million for policy and procedure failures related to ESG investments,6 and DWS Investment Management Americas Inc. was charged $25 million in part for misstatements regarding its ESG investment processes.7 Should Costco be implicated in greenwashing, the impact on shareholders could be considerable, as company valuation and investor confidence plummets.