In a nearly two-thirds shareholder vote at Home Depot’s Annual General Meeting, investors defied Home Depot’s board and approved a resolution from Green Century Capital Management calling on the company to assess how it can address deforestation and the degradation of irreplaceable primary forests in its supply chains. As just the second forest-related shareholder resolution to pass over company opposition, and the first in the lumber sector, this vote signals that irresponsible sourcing of forest products is no longer an acceptable cost of doing business.
This shareholder vote comes after years of Home Depot’s failure to align its Wood Purchasing Policy with 21st century environmental realities. Home Depot has applied its DIY ethic where it doesn’t belong — to its wood sourcing — offloading responsibility for ensuring sustainable forest standards and failing to track or disclose its forest impacts. As 59 environmental organizations recently wrote to Home Depot’s CEO, Ted Decker, Home Depot “is profiting from the destruction of irreplaceable and ecologically vital forests, rather than working to align its sourcing with a climate-safe future.”
Home Depot’s policy, largely unchanged in the last 20 years, is a relic that fails to meet even baseline sustainability and human rights standards, as NRDC and other NGOs outlined in a brief to investors. Lacking any clear metrics or commitments, the policy has no safeguards to prevent the company from sourcing from climate-critical primary and old-growth forests, from driving the erosion of threatened species’ habitat, or from violating the rights of Indigenous Peoples.
From its 2x4s and wooden panels to its chairs, doors and cabinets, Home Depot’s aisles are an emporium of forest destruction, implicating the company — and, unwittingly, its customers — in the loss of forests that are vital to meeting international climate targets. This includes the Canadian boreal forest, the largest remaining primary forest and the most carbon-dense ecosystem in the world. It is also among the most threatened. Each year, the logging industry clearcuts more than a million acres of boreal forest, much of this in primary forests. This logging drives catastrophic climate and biodiversity impacts and has elevated Canada to the ignominious distinction of ranking third globally in intact forest landscape loss. Nearly all of Canada’s provinces also lack foundational Indigenous rights protections, meaning that, without its own standard, Home Depot cannot guarantee that its products do not come at the expense of Indigenous communities’ right to dictate the future of their territories.
Home Depot’s board chose to oppose the measure, doubling down on its approach of obfuscation, denial and deflection.
Home Depot has also faced growing scrutiny for its impacts in the tropics, including most recently for driving the deforestation of primary tropical rainforests in Ecuador — some of the most biodiverse forests in the world.
Rather than responding to Green Century’s resolution with long-overdue action, Home Depot’s board chose to oppose the measure, doubling down on its approach of obfuscation, denial and deflection. The company even included a misleading portrayal in its Proxy Statement of its relationship with environmental NGOs that prompted NRDC, Greenpeace and Rainforest Action Network to send ;a letter to Home Depot’s CEO.
In contrast, Home Depot’s largest competitor, Lowe’s, agreed, in response to an identical shareholder resolution from Green Century, to produce a report by the end of this year on how it can eliminate deforestation and primary forest degradation from its supply chains and is considering FPIC requirements for its suppliers. While Lowe’s standard also fails to meet foundational sustainability and human rights requirements, its willing commitment to this report and stronger transparency practices place it clearly ahead of Home Depot.
This investor vote is not just a reproach to Home Depot’s leadership, but a signal to the entire marketplace that companies’ abrogation of forest and human rights standards is not just an environmental liability, but a financial one. In the face of new domestic and international legislation around the protection of climate-critical forests, growing recognition from the scientific and international community around the need for protecting forests globally, and increasing consumer expectations around sustainable sourcing, companies that fail to implement strong forest protections will fall increasingly out of sync with marketplace realities.
Home Depot rose to the moment over 20 years ago, when, in the wake of calls from environmental NGOs and the public, it first created its Wood Purchasing Policy. But after two decades of neglect, that policy has fallen into disrepair and no longer holds up under the realities of today’s environmental crises. In the wake of this historic investor vote, Home Depot has a clear mandate to give the company’s wood sourcing a new, more sustainable foundation.
This post originally appeared on NRDC’s Expert Blog.
June 8, 2022 at 02:15PM