Costco’s Updated 2023 Financed Emissions Analysis by Topo Finance

The hidden climate impacts of corporate finance and Costco's emissions associated with its cash in banks.

Until recently, businesses have largely treated their banking as a “neutral” climate activity. However, groundbreaking research published in the 2022 report—The Carbon Bankroll: The Climate Impact and Untapped Power of Corporate Cash by Topo Finance and its partners Climate Safe Lending Network and BankFWD—revealed that where companies bank and how they invest is one of the most important climate decisions they make.

Costco’s cash, investments, and co-branded credit cards can have a major positive—or negative—climate impact. The climate impact of an institution’s banking relationships stems from the fact that as much as 90% of an institution’s cash kept in a bank is loaned out by that bank, and a significant portion of that goes to providing loans to develop new coal, oil, and gas projects. Indeed, since the Paris Agreement was adopted in late 2015, the world’s 60 biggest banks poured over $5.5 trillion into the fossil fuel industry.

The Carbon Bankroll report was a first-of-its-kind analysis of the hidden climate impacts of corporate finance. The report revealed that when companies account for the financed emissions that result from their banking and investment practices, their greenhouse gas footprints are revealed to be much larger. The Carbon Bankroll was covered by the Wall Street Journal and the New Yorker, endorsed by the lead negotiator of the Paris Agreement, Christina Figueres, and former Unilever CEO, Paul Polman, and was a finalist for the Keeling Curve Prize.

Since the release of the Carbon Bankroll, Seventh Generation became the first company to voluntarily disclose its financed emissions, and in the coming years this reporting will become a standard practice for all responsible companies. With its scale and reputation, Costco has the opportunity to be an industry leader by addressing the climate impact of its banking relationships.

The Emissions from Costco’s Banking 

In September 2023, Third Act and Stop the Money Pipeline commissioned Topo Finance, which co-led the data development section of the Carbon Bankroll report, to conduct an independent analysis to estimate the emissions associated with Costco’s cash holdings using the same methodology they employed in the 2022 Carbon Bankroll report (reference the original Costco analysis here). In January 2024, Topo Finance updated its analysis with new 2023 data for Costco’s cash and reported carbon emissions and new carbon intensity figures for the six big Wall Street banks (the new carbon intensity figures will be published by Topo Finance in a forthcoming February 2024 report).

Topo Finance’s key findings include:

• The updated 2023 estimated indicative financed emissions enabled by Costco’s cash holdings is 4.02 million metric tons of CO2e, up from the 2022 estimate of 1.53 million metric tons, an increase of more than 260%. 
• Costco’s cash emissions are equivalent to 85.3% of Costco’s operational emissions (Scope 1, 2, and 3) of 4.7 million metric tons, up from the 2022 estimate of 35.6%. If cash emissions were considered part of Costco’s operational emissions, then this would be the majority source of its operational carbon footprint. Costco’s operational emissions come from the energy used for heating, lighting, and refrigeration in its warehouses, deliveries, capital goods, and employee travel and commuting, among others.  

The increase in this estimate is due primarily to the dramatic increase in the average of the large banks’ carbon intensity emissions factor figures, which nearly doubled. In addition, Costco has grown and so its cash holdings increased (from $10.2 billion in 2022 to $13.7 billion in 2023), as did its self-reported carbon footprint (up to 4.7 million metric tons from 4.3 million metric tons).

Topo Finance’s methodology and analysis is more fully described in this PDF. It is important to note that Topo Finance does not have access to information about exactly which banks manage Costco’s corporate cash, so Topo Finance used in its analysis carbon intensity figures per unit of cash and investment based on the average of data from the six Global Systemically Important Banks (G-SIBs) in the United States, which includes Citi (see The Carbon Bankroll report’s Appendix for more on the methodology and note that the updated bank figures will be published by Topo Finance in its forthcoming February 2024 report).

To put Topo Finance’s findings in perspective, Third Act and Stop the Money Pipeline used the EPA’s Greenhouse Gas Calculator, showing Costco’s emissions from its “financial carbon footprint” are equivalent to the emissions generated by:

• 894,783 gasoline-powered vehicles driven for one year,
• 4.5 billion pounds of coal burned, or
• 10.1 gas-fired power plants operating for one year.

As shown, the banks Costco chooses to use are a crucial component of the company’s overall climate impact, and are essential for Costco to address in order to live up to its climate commitments.

That’s why a coalition of organizations launched the Costco: Clean Up Your Credit Card campaign in September 2023. The petition is sponsored by 12 organizations: Third Act, Stop the Money Pipeline, New York Communities for Change, Climate Organizing Hub, Stand.earth, Hip Hop Caucus, Green America, Climate Action California, Friends of the Earth Action, Oil & Gas Action Network, Elders Climate Action, People Power United.