Earlier this month, home improvement retail giant Home Depot quietly released its updated annual sustainability report. Like many other major U.S. corporations in the post-Paris Agreement era, the retailer has set ambitious targets for achieving better energy efficiency, more responsible sourcing and managing waste. Home Depot's blueprint for meeting those goals, however, is relatively unique among large retailers. That's because the company's low-key approach to constructing a more sustainable future relies heavily on employing circular economy principles throughout its operations. Designing circular economy ideals into a conventional big-box store is a pretty complex task. While the circular economic model aims to eliminate waste, cut emissions, keep materials at play and regenerate natural systems, retailers traditionally have acted pretty linearly: extracting resources; manufacturing products; and selling to customers to dispose of as they see fit. While Home Depot is no exception to that historical model of consumption, the construction supplier sees itself in a unique position to reduce the environmental impact of the products it sources while helping customers create more resilient environments themselves. Ron Jarvis, vice president of environmental innovation and a 20-plus-year veteran at the company, said the decision made sense for where the company (and the planet) were headed. "Circular economy is the next phase of recycling that puts more thought into the design and end of life stages of a product’s lifecycle," he said. "We hope the expansion of circular economy products will create a decrease in natural resource depletion and raw materials demand." Not to mention, new research suggests that the rise of the circular economy could unlock $4.5 trillion in new economic growth by 2030. Thinking about sustainability is nothing new for Home Depot, according to Jarvis. After the company’s inception in the late 1970s, subsequent considerable expansion and ensuing criticism by environmental activists, the retailer began to work on transparency across its supply chain and product labeling in the early 1990s. It officially formed its sustainability strategy in 1999, under the direction of co-founder Arthur Blank, and enlisted The Natural Step process to help merchants procure more sustainable merchandise. (If Natural Step sounds familiar, that’s because it was also the sustainability framework used by the likes of carpet company Interface, athletic clothing corporation Nike and furniture retailer IKEA.) After examining Home Depot’s full supply chain, the sustainability team realized that with more than 174,000 products in about 2,200 stores across the United States, almost all of the company’s environmental concerns came from what it was selling. Still, in the late 1990s and early 2000s, there was minimal U.S. consumer demand for green construction supplies. Forging ahead, the company set standards for its suppliers, only sourcing from those that complied and conducting internal audits to ensure that the benchmarks were met. Jarvis pointed to efforts to cut harsh chemicals in paint and paint thinners, as well as to establish sustainable wood sourcing guidelines for everything from its lumber to the knobs on pull chains in its ceiling fans. In 2007, Home Depot implemented a sustainable products classification program called Eco Options. Consumers could choose to buy environmentally friendly goods — and even if they didn’t, that’s still what they were getting, Jarvis said. More recently, though, both climate change concerns and market changes have shaped new sustainability efforts and priorities for Home Depot. The company is planning fewer new store openings these days, but it is launching more distribution centers across the country; meanwhile, stakeholders have become more interested in setting and meeting science-based targets. The most accessible way retailers typically flirt with circular economy principles is through packaging, and that’s how Home Depot started, too. By recycling plastic packaging along with wood scraps, the company sold its waste back to a supplier to create composite — keeping both materials in play. Reverse logistics can create some convoluted loops in the circular economy but navigating them manages to save valuable virgin material, especially in the midst of the war on plastics, said GreenBiz analyst Lauren Phipps. It also saves on extra transportation emissions. Home Depot also has focused on cutting suspect chemicals out of its products, especially for paint, carpet, insulation, vinyl flooring and household cleaning product, according to communications manager Yang Yang. That helps products last longer without endangering the health of customers and other building inhabitants. Home Depot has had some of its products certified by Cradle to Cradle Products Innovation Institute (C2CPII), a third-party certifier active in the circular economy field. C2CPII President Lew Perkins said in a statement: "Cradle to Cradle Certified offers a pathway for Home Depot and its suppliers to work together on improving the human and environmental health and safety of products for the built environment." There are special concerns for buildings’ great impacts on climate change, but also, climate change’s impacts on buildings. And therein lies another opportunity for Home Depot. As natural disasters continue to affect communities, residents needing to rebuild will need safer and healthier materials. Jarvis also spoke about the need to keep Home Depot stores open for these emergencies and pointed to new energy independence and storage projects, as well as light and HVAC in-store retrofits. (It doesn't hurt that these initiatives also should help the company meet its goals to cut absolute emissions by almost 40 percent by 2030.) In the past, Home Depot has met criticism for its chemical use and sourcing policies. The company is under investigation by the U.S. Environmental Protection Agency for alleged lead paint removal mishandling (although this did lead to announcements of more toxics bans). And Home Depot only recently (PDF) withdrew from sourcing lumber from a few key conflict areas. Jarvis also acknowledged that while Home Depot does what it can to mitigate the end-of-life impact of products, like offering battery recycling, it can’t guarantee that every product will find a loving home at the end of its life. That said, he supports building out more recycling infrastructure for all consumer products and actively encourages consumer awareness campaigns.
Home Depot is basing its approach to achieving sustainability goals on a circular economic model. Rather than the traditional approach where a company uses resources to make a product that is then sold and eventually disposed of by customers, Home Depot is taking a less linear path. It started by recycling plastic packaging along with wood chips, then selling the waste to a supplier, which used it to develop composite. By keeping materials in play for longer, virgin resources are not wasted. The US company's head of environmental innovation, Ron Jarvis, described the approach as the next phase of recycling.