Good morning, and welcome to The Home Depot's Investor ESG Webcast. Today's event will consist of prepared remarks followed by a question and answer session. In your webcast viewer, please use the submit a question box to submit and questions for today's event. Questions will be limited to analysts and investors only. If we are unable to get to your question during the call, Please call Investor Relations at 770-384-2387.
Please note this event is being recorded. It is now my pleasure to introduce your host, Isabelle Jancey, Vice President of Investor Relations and Treasurer. Please Go ahead.
Thank you, Andrea. Good morning and thank you everyone for joining us today. When our founders opened the first Home Depot store, They created a well defined culture. More than 40 years later, our eight core values and our commitment to put our customers and and associates first are still the lens through which we view every decision. As a result, our commitment to running Responsible and sustainable company is foundational to our business.
We organize our approach to ESG around 3 key pillars: focusing on our people, operating sustainably and strengthening our communities. We recently published our 2021 ESG that details our sustainability efforts, including our goals across our 3 pillars and progress towards those goals. The report can be found on our website in the Responsibility section as well as in the Investor Relations section of the site under the ESG Investor During today's event, we are going to use this opportunity to discuss the work we have done around operating sustainably, focusing on the environment and how we are continuing to make progress against our stated goals. During today's and Q and A. We will only be addressing environmentally focused questions.
If there are any questions on other ESG topics, please contact our Investor Relations department. With that, I have the pleasure of introducing Ron Jarvis, Chief Sustainability Officer at The Home Depot. Ron has spent the past 2 decades driving environmental efforts at The Home Depot. And environmental changes. Now, let me turn it over to Ron.
Thank you, Isabelle, and thank you to everyone listening for your interest in learning more about The Home Depot and our activities in reducing environmental impacts. As we all know, 2020 was a year full of challenge and uncertainty As the world navigated the global COVID-nineteen pandemic, we experienced unprecedented demand in our business, achieving approximately 130 $2,000,000,000 in total sales, which represented approximately $22,000,000,000 of growth from fiscal 2019. For context, It took us 19 years as a company to achieve the first $20,000,000,000 in total sales, and we outgrew that in fiscal 2020 alone. And yet, while our team demonstrated exceptional execution to serve our customers in the face of unprecedented demand, We also continued our progress to operate more sustainably and reduce our environmental impact. In 2020, we decreased Our Scope 1 and 2 carbon emissions by over 127,000 metric tons, while growing ourselves.
Our investments in efficiency helped us achieve a 22% reduction in scope 1 and 2 carbon intensity For each dollar of revenue we earn versus 2019, our U. S. Stores cut electricity consumption by more than 15% year over year in 2020. So while we've made progress in 2020, Our focus on reducing our environmental impact is not new. At The Home Depot, we have had environmental initiatives since 1992 that help create and promote products that have less of an environmental impact.
Since then, we have influenced many positive product changes in multiple industries, and we have been recognized over the years by governmental and other third party organizations for the progress we have made. This includes the Carbon Disclosure Project or CDP, who has scored us an A- or better And a sector leader on climate change since 2013. We have also updated our policies over the years to help drive the industry to innovate greener products for our customers. Some examples of these updates include moving our interior and exterior latex Water based wall paints to 0 or low VOC and updating our chemical policy to add removal of PFAS for carpets and rugs that we sell. Our commitment to sustainability impacts all areas of operation.
For purposes of today's discussion, we've organized our initiatives around 3 functional areas: sustainable products, operational footprint and supply chain distribution. We understand that our biggest environmental impact comes from the products that we sell. In our product assortments, there are multiple environmental touch points coming from many industries. We have found that these touch points can be placed into 5 categories, And those categories are sustainable forestry, responsible chemistry, water conservation, circularity, which is waste and recycle and carbon emissions. We launched our EcoOptions program in 2007 in partnership with Scientific Certification Systems or SCS.
SES is a 3rd party certification body that validates environmental claims. This program helps our customers identify products that have less of an impact on the environment and encourages our suppliers to provide more sustainable products. Certifications that are recognized in the program include Energy Star, WaterSense, OMRI Organic Products, FSC certified wood, Safer Choice for chemicals And more. Since launching the program in 2007, it has grown to more than $14,000,000,000 in annual sales and over 35,000 SKUs as of fiscal 2020. This year on Earth Day, we relaunched Our EcoOptions website and program to include Eco Actions.
Our Eco Actions program Gives our environmentally innovative suppliers a platform to articulate and illustrate the positive environmental changes they are making in their manufacturing process, distribution or product use. It also provides an educational platform for our customers to learn how they can reduce their home's environmental footprint. One great example of how our new Eco Action site can help customers reduce their impact are our resources on organic gardening. We offer customer project tutorials, product highlights for organic gardening and natural pesticide products to help increase awareness of their availability and benefits and to give our customers the tools they need to start their own organic gardens. Many of our customers are looking for products to help reduce their monthly household utility costs as well as reduce their environmental footprint.
Our energy savings products, including Energy Star products can help with both. In 2020, we estimate that purchase and proper use of ENERGY STAR products alone Helped our customers save approximately $1,000,000,000 in energy costs and more than 7,000,000,000 kilowatt hours of electricity. Those energy saving purchases would mean lowering customers' carbon emissions by 5,000,000 metric tons just for the products purchased in 2020. We've also worked with our suppliers to reduce the amount of virgin Through partnerships with companies like American Plastics, Behr Paint and QEP, Our suppliers were able to redesign more than 200 of the products we sell to reduce the amount of single use plastic in 2020. A few years ago, we removed expanded polystyrene, commonly referred to as Styrofoam or EPS, from our holiday packaging and our private brands assortment, replacing it with more easily recyclable materials.
Just a few years later, we are working toward our goal to eliminate EPS Styrofoam as well as PVC from all of our private brand packaging by the end of fiscal 2023. For many years, society has extracted resources from the earth to manufacture product. We now have an abundance of above ground resources that can be used and recycled into new products without extracting from the earth. This product creates a circular economy that can reduce the environmental impact in manufacturing and waste. Our focus on circularity reflects our aim to prevent products and packaging from becoming trash.
We have a 3 pronged approach for supporting circularity. Number 1, recycle by separating and collecting raw materials from our own waste streams and working with a few targeted suppliers to turn waste into new products. 2, Repair items in our stores and for our customers to extend the life of products and avoid the energy emissions from manufacturing replacements or new 3, reuse materials so less waste goes into landfills. A wonderful example of our focus on circularity in action is our partnership with Trex, one of our composite decking suppliers. We have developed a program that captures some of our LDPE or low density polyethylene plastic shrink-wrap from our stores' waste stream.
This plastic waste is shipped to Trex and used to manufacture new composite decking that is sold in our stores today. We've also incorporated circularity into our supply chain through our appliance delivery program. As we roll out Our market delivery operations or MDOs, appliance delivery program. We were capturing the appliance cardboard and EPS Styrofoam Packaging, then returning the excess packaging to the MDOs to be recycled. We have installed Styrofoam densifiers in our MDOs allowing us to compress the used Styrofoam into blocks.
We then sell the collected styrofoam to manufacturing companies to reuse for new products, thus eliminating the need for the customer Or the installer to dispose of the waste. We're addressing chemicals of concern in our products and providing transparency into the approach through our chemical strategy. In 2017, We announced our first chemical policy for carpet, insulation and paint. Since then, we have added more products to our policy, And those include other flooring products, live goods, paint removers and cleaning products. We evaluate our chemical strategy annually to ensure our approach and goals are appropriate and meet the needs of our stakeholders.
We are committed to increasing our assortment of products that maintain third party certifications of their chemical ingredients and that meet high environmental standards. We encourage suppliers' efforts to improve chemicals in categories with the greatest potential impact on indoor air quality, and we also conduct periodic assessments of key categories to track progress on environmental innovations in green chemistry. We and our suppliers also partner with respected third party certification organizations and environmental nonprofits that guide the home improvement industry towards safer chemical ingredient use. The Home Depot supports the work of the Green Chemistry and Commerce Council, or GC3 through our annual membership and participation in the Retail Leadership Council of GC3. Now turning to our operational footprint.
As you can see, we have a number of activities in and around our physical store to make our store operations more sustainable. The Home Depot's aim to use resources efficiently is driven by business demands, But we are proud that the effort we put into reducing our consumption of electricity and water is also good for the planet. As I mentioned earlier, initiatives like LED lighting and HVAC system upgrades help reduce our 2020 U. S. Store electricity by more than 14% year over year.
In addition to that, we also boosted Our renewable energy capacity by more than 13% compared to 2019. We have also signed on to new off-site solar that will significantly increase our solar capacity by 2023. We have also increased our focus on water savings, Implementing smart irrigation systems capable of reducing our irrigation related consumption by approximately 30% at almost 4.50 U. S. Stores.
Now we plan to roll out more of these water saving systems in 2021, aiming to add them in 500 stores by the end of this year. Those improvements made to our physical stores have led to significant decreases in the energy use in our stores. This chart reflects electricity use reduction in our U. S. Stores from 2010 through 2020.
As you can see, the kilowatt use per square foot Has dropped from 20.8 to 11.6 kilowatts per square foot on an annual basis. Simply stated, our electricity use dropped approximately 44% in our stores, while our sales increased 94%. This far exceeds the goal we set a few years ago to reduce the store kilowatt electricity use 20% by 2020. And finally, turning to our supply chain efforts. Our supply chain investments over the years have assisted us in optimizing the way we store and move products, reducing truckloads by filling trucks more efficiently, lowering our fuel consumption and reducing emissions.
Despite seeing more than a 20% increase in volume flow through our supply chain in 2020, We were able to leverage efficiencies we have gained over the years and reduce our supply chain carbon intensity. By making our supply chain more efficient, we reduced business costs and the impact that our product distribution has on the environment. In 2010, we set our first goal for energy use reduction, and we have continued to expand on these goals since then. We have a number of goals across our different spheres of influence. When deciding on specific environmental targets, We use our materiality assessment framework in which we assess, prioritize and address material issues.
It is through these steps as well as ongoing dialogue with partners and stakeholders that we decide what is material for the purpose of our ESG efforts and where we have the greatest impact. A few examples of the goals that we have previously set and previously achieved are Producing or procuring 135 Megawatts of Renewable or Alternative Energy, helping our Customers reduced their water use by 250,000,000,000 gallons and reducing U. S. Store kilowatt hour electricity use by 20% compared to 2010. And as I stated earlier, we ended up at 44% with a goal of 20%, so very proud of the Our newest goals, which we've laid out in our ESG report, continue to build on the progress we have made over the years.
As we look to operate our business more sustainably, we have announced our goal to set science based target initiative approved goals for Scope 1, 2 And 3, by 2023, to reduce emissions in line with the Paris Agreement. In addition, we announced a pledge to have 100 percent renewable energy for all Home Depot facilities worldwide by 2,030. Thank you for this opportunity to reflect on our progress. And now, Isabel, I'll turn it back to you.
Thank you, Ron. We will now begin the question and answer session of the call. As a reminder, if you would like to submit a question, Please do so using the submit a question box in your webcast viewer. As a reminder, during today's Q and A, we will only be addressing environmentally Our first question is we note in your CDP report your Scope 3 emissions are significantly higher than your Scope 1 and 2 emissions, which happens to be higher than any other company in our fund, including an oil and gas company's Scope 3 emissions. Your report suggests that the vast majority of these come from use of products sold category.
It seems like this relates Have you considered any strategies for eventually substituting some of these items for electric alternatives that may bring down your Scope 3 emissions in this category. You report your 2nd largest category of Scope 3 emissions as lifecycle emissions from purchased goods and We would also be interested to hear any more general strategies you may have for reducing Scope 3 emissions in the future, including an upstream transportation and distribution categories as well as purchased fuel or energy.
Great question and thank you for the question. Scope 3 is always something that every company is looking at. And for Scope 3, emissions can be challenging to compare across companies due to the inconsistent reporting methodology and potential duplication. So while I can't speak to other companies' metrics, our current method for use of products sold includes emissions for the life of the product ranging upward of 10 to 14 years. Most of those emissions are long term use of Plug in products like bulbs, appliances and heaters.
I can say that Home Depot and Air Suppliers have done a great job innovating in energy use reduction for plug ins and battery operated alternatives for gas, lawn equipment. Over the years, our merchants have worked diligently with our suppliers and in some cases governmental agencies to bring to market products that require less energy To perform the same or better than standard products. Through this type of innovation, we estimate our customers avoided over 5,000,000 tons of carbon emissions in 2020 just for the products that they purchased in 2020. Innovation has been a hallmark for The Home Depot. We carry many of the leading battery powered brands, whose performance is equal to gas powered tools.
Over the years, we've seen categories like outdoor power that were traditionally exclusive gas motors for decades are quickly shifting to battery powered technology. As we begin to set our strategies for our science based target initiative Scope 3 goal. We will engage our suppliers to continue our quest for products that reduce these emissions. In addition, as I stated in my prepared remarks, investments in our supply chain have helped create efficiencies, which in turn reduce our upstream and distribution scope 3 missions. These include space sharing on trucks, floating products into trucks more efficiently And utilizing alternative energy vehicles to transport our goods.
Our next question is Home Home Depot has a unique wood purchasing policy outlining your commitment to give preference to wood that has come from forest managed in a responsible way And to eliminate wood purchases from endangered regions of the world. Given your strong commitment to this area, would you consider responding to CDP's forest This would further signal your support for Responsible Forest Management and we would be supportive of such a disclosure.
Thank you for the question. We received many requests participating in programs and questionnaires. We tend to focus on dedicated resources to support our merchants and suppliers in finding ways to reduce our environmental impact. We know that the majority of our wood purchases come from North American forest. We have enhanced our wood purchasing policy to include the requirements of FSC certification for any wood sourced from the Amazon or Congo Basins as well as Solomon Islands and Papua New Guinea.
At this time, we do not plan to participate in this year's Forest Disclosure Project.
For Home Depot to meet net zero and other ESG commitments, performance of HD suppliers will need to improve significantly. How do you The HD supplier reporting and performance requirements changing in the coming years. Will the reporting and performance requirements be applied uniformly across product categories or focus on certain product categories. Which ones will require more or less attention hardware versus paint. How might the new requirements impact product pricing margins?
That is a great question and one that I have worked with for 20 years on how do we put together a program to have supplier reporting on their performance. Due to the variance in our supplier industry base, there is not a one size fits all ESG scorecard for our suppliers. We do not try to create a score for our suppliers knowing that it would have to be so broad and encompassing that the scores in most cases would be irrelevant. Think of comparing a small live goods nursery to a large carpet manufacturer. To correctly rank the environmental performance of your suppliers, you'd need a baseline by industry and then rank your suppliers on which ones are above or below the optimal sustainability performance line.
In some cases, There are industry protocols and standards, and we can navigate our suppliers in that direction for production or product environmental improvement. Until there is a uniform evaluation program that reports on each industry's unique impact, We will continue to address specific concerns in specific industries. I cannot speak on future issues, but historically, We have not seen an impact to pricing or margins as we have addressed environmental opportunities.
Our next question is, of ESG, how much of your resources are focused on the E, the S and the G? If It is true according to McKinsey, adherence to ESG can grow revenue, lower costs, comply with federal and provide additional information on our financial results. Can you quantify how your adherence to ESG has addressed these issues above? What has been the green bonds issued, if any, and what are the targets of those bonds and expectations? And has HD done a cost benefit analysis to determine if the adherence to ESG standards is actually contributing to profits?
That is a great question and not a new question for Home Depot. ESG has always been embedded And how we run the business for at least 2 decades and probably longer than that. We evaluate the business case of our ESG initiatives much like we do our strategic initiatives and prioritize based on our ESG Materiality Assessment Framework. We know that when we invest in running a responsible, Sustainable company, we make our business stronger, more flexible and more resilient, which in turn Creates value for all of our stakeholders. Using our resources wisely by investing in things like LED lighting, Smart Irrigation Systems reduces cost, while also making our store operations more sustainable.
Investing to make our supply chain more efficient Reduces miles traveled, fuel consumed and trucks on the road, which result in reduction both in business cost and the impact on product distribution has on the environment. And to the last part of your question, we have not issued Any green or sustainability bonds at this point.
Our next question is, do you consider what your competitors are in this area and does that impact your level of spending? And do you consider what suppliers are doing and does that impact your decisions with brands?
Well, I'll answer the second part of the question first. We definitely consider what our suppliers are doing and it does impact Many things across the board as our merchants look at products. And probably 15 years ago, we started seeing more of our suppliers come in with pages tied to sustainability in the industry and their company and things They're doing when sustainability became a competitive measurement among our suppliers. We did see a big change and that's how The improvement that we've all witnessed in all the different industries has happened, in my case, in many cases, is where competitors We're pushing each other to do better for the environment. So yes, we do track what our suppliers are doing.
As far as competitors go, We do, a competitor is a competitor. Now, we go toe to toe on pricing and assortment and availability and customer service. We Do enjoy being the first to market on certain sustainability issues, but we would rather have sustainability be the tide that rises all ships. And so that's something that we're encouraged when we see other companies take big swings and do things on the sustainability side, Because in most cases, it is a tide that rises all ships. So great question.
The next question is, can you talk about the regulatory environment and how that could accelerate any of your efforts? And how that could accelerate any of your efforts, in particular customer behavior and demand towards more sustainable products. At 10% of sales today, how big could that be over the next decade?
Okay. That's a great question. Give me 2 seconds to reread it. 10% of our sales today, how could that be over the next decade? The 10%, and I assume that you're talking about ECO options and that being 10% of our sales because it is a A little bit over 10% of our sales today.
And we do have other verification and certification programs like SFI Like SFI wood, other certification programs for chemical use That are not included in ECO options. So if you were to ask me, do we have more than 10% of our products that are labeled From different verification and certification companies to be greener than others, I would say, yes, we do. It's greater than 10%. And as far as regulatory environment, we support it. We look at things across the board.
And on the operations We feel like that a lot of things that we've done helps us with regulatory issues, stay ahead of the issues. And then for product categories, we're for anything that can help make the world a better place. And if it's regulatory issues that reduce water use or protect Endangered forest or reduce certain types of chemicals, we don't have a concern with it and we support it.
Okay. Our next question is, do you foresee setting a goal for becoming carbon negative? If so, can you forecast when that might be?
That is we would have to understand the definition of carbon negative. It's a lot like net 0. There is not a true definition out today. I know that WRI and Science Based Target Initiatives are working to release a definition for net 0, Which I assume will also include some verbiage on carbon negative. In the future, I'm hoping this year we'll see that information.
So we haven't said anything yet because of the, to me, the unclarity around what the definition is for net 0. And for net 0 in scope 1 and 2 or carbon neutral or negative in scope 1 and 2, That's something that we look at that is probably obtainable. As we look at Scope 3 And as I stated earlier, many industries have different definitions for what Scope 3 is. And for those that are versed in Scope 3, There's 15 different categories to choose from and to report out on and to the depth that you report inside of those Scope 3, It's hard to determine today what your definition would be. So as of now, we haven't set a carbon negative goal And we are looking for more definitions to come out around net 0 and carbon negative in the future.
The next question is, I understand the ability to obtain 100% carbon free electricity by 2,030, Do your buildings utilize natural gas for heating? If so, how will this be offset overcome?
We do have some buildings that use natural gas and our energy group is working on that as to how we will offset that in the future As whether we do onsets, and I think part of the definition that will come out will be how the companies Utilize that, but we do have some stores that do use natural gas for heating as well as The fuel cells that we have in the companies use natural gas for to ignite and start those processes as well.
Are they also doing similar initiatives and are you mandating them to do so?
That's a great question. And we are have operations in Mexico and Canada, and we have very similar results in both Mexico and Canada that we could look at and we can report on. And both of those companies or countries are Enhancing their website, so we have more information for the citizens of Canada and for the citizens of Mexico to look to see specifically In those countries, what Home Depot is doing. But the answer is yes, we've had very, very similar reductions in energy use in those stores
You've partly answered the next question, but how does Home Depot engage its consumers on sustainability?
Well, there's a couple of different ways. We updated our ECO Options website, as I stated this year, to include eco actions. We think that a lot of our customers do a lot of research before they come to the stores, And we want to have the capacity for them if they're looking at certain items to go in and research the information. We do have packaging and signage in some of the stores for certain products to talk about sustainability, but we do think that the upgrades that we've made In the built from scratch website, our ESG report, we talk about products a lot as to what we're doing with products there And then the enhancement of our Eagle Actions website has helped us get the type of information out that we think the consumers are looking for.
How much of the traditionally gas powered products HD cells such as outdoor power shifted to electric or battery powered? How much
I don't have the percentages in front of me, but just walk into a Home Depot store and look At the outdoor power equipment and how that transition, how fast it has happened from a Few years ago, you walk in and those aisles were nothing but gas powered motors. And today, a large percentage of them are Battery operated products. And we think that's a great thing. We're aware that it's been estimated that American consumers We still over 18,000,000 gallons of gas per year refueling loan equipment. So as we move to battery operated Products, not only is it the emissions that are eliminated, it's also the spillage of gas.
So we think that's a great thing and we support it and We have a, as you can see in the stores, a tremendous lineup for battery operated products and we have a long ways to go. It's my estimation that eventually it will probably overtake all of the gas engines.
Retailers play an important role in the circular Economy as they have the footprint to offer convenient collection of products that has reached end of life. Are there any plans to expand
That's a great question. And we do have the program today for Rechargeable batteries, CFL bulbs and some other products. And that's Pretty much to the extent. We do have a couple of projects and pilots across the country in different areas where we are recycling other products like Some composting, but for us, our main goal is customer service on the retail side, getting customers in and out of the store. And as we add large recycle programs in that general area of a retail store, it can be very disruptive to operations.
So as of right now, our plans are to stay with the programs that we have.
In reducing environmental footprint and serving the last mile, what mode of delivery would Home Depot encourage, Open or customer pickup.
That is a great question and something that we're working with A couple of different groups now to try to understand what is the best program. Is it for bottom line delivered to a customer's house, bottom line pickup in store, or have the customer come pick it up? It really depends on where the customer is and where they close to the store, dropping their child off at school, so they just ran across the parking lot Pick up something from Home Depot. What's the environmental footprint, the carbon emissions from that trip? It would be very low.
So that's not an easy question. So if we look at it and say that what is our preference, we don't have a preference. It's up to the customer. And that's why we've put so many dollars into our supply chain Over the past few years is to give the customer the ease to shop the way they want to. If they want it delivered to the store, we'll deliver from the store to their house, We'll have it there.
If they want to pick it up after they drop their child off at school, it will be at the store in the kind of quantities that they want. So our goal is to keep up with the customer As they make their changes in the way they're shopping.
With the increasing prevalence of electric vehicle technologies, Do you foresee the need to accommodate for this type of transportation?
And I would assume that the question is saying, do we need to accommodate that is, do we need to put Chargers, EV chargers in our parking lot. That in my mind, I think the question the only way that we could accommodate. Now we have we do have some stores that have EV chargers. Our customers typically stay at the store for 15 to 20 minutes. So it's a very short visit.
I think most of the people that have electric cars don't work Home Depot into their recharging plans, Knowing it's going to be a very short visit. So but we do have some stores that have it and we will have to see how The industry and the market plays out.
I understand you have an investment program to stand up several 100 new supply
Our supply chain investments work to optimize the way we store and move products, Reduce truckloads by filling trucks more efficiently, lower our fuel consumption and reduce emissions. Despite seeing more than 20% increase in volume flow through our supply chain in 2020, we were able to leverage the efficiencies we gained over the years and lowered our
Given that you're a retailer with private label and branded Products, how do you think about the impact of product packaging on the environment?
The Home Depot's packaging team works with our private brand product suppliers to reduce the environmental impact of packaging. By applying science to package design, we continue to make progress in reducing waste while maintaining packaging effectiveness. From 2017 through 2020, our packaging innovations allowed us to we redesigned 366 packages to reduce size and materials, and in doing so, we avoided sending over 3,800 cargo containers across the ocean. In 2020, we committed to eliminating, as I spoke earlier, EPS and PVC from our private brand packaging by the end of 'twenty three. And just in 2020 alone, we reduced over 870,000 cubic feet and 960,000 square feet That's a great question.
I took the job of Sustainability in 2000. And at that time, I sat down with Arthur Blank, who is our President, And he said, how big do you think this department should be? And I said, the department should be small. And the reason being is because We do not need to have a green paint merchant in the paint department. Our paint merchant needs to know what the sustainability issues are around paint.
The sustainability department should be working with the functional areas to help guide them on things that we need to do, Not to go out and be the only ones working on sustainability. So when I think of the question, how many people work on sustainability, I'd like to think 100 of 1,000. If I had to produce a list inside of the corporate headquarters of people that are working on it, it would be Scores of people. In my team, there are 3 people that work on sustainability, but the sphere of influence travels across 1,000.
How do you ensure that the products that you sell are ethically and responsibly sourced?
Great question. We engage our suppliers in our commitment to ethical sourcing by purchasing products made in factories that adhere to our responsible sourcing standards, which are part of the commercial agreements with our suppliers. These standards mandate that suppliers and factories abide by all applicable international and local rules, laws and regulations in the manufacturing distribution of merchandise or services that they provide us. We conducted over 3,000 audits and follow-up visits in 34 countries under our responsible sourcing policy just in 2020 alone. We provide a detailed discussion of our responsible sourcing program, including by responsible sourcing standards and guidelines in a report on our website that can be found on our ESG page of our Investor Relations website.
With the push for disclosing data and metrics intensifying, how do you prioritize what you disclose?
That is a question that we've been looking at for quite a few years. Do you prioritize it based on the latest Call that you received from one of your stakeholders or do you prioritize it based on what you think is important to the company And to the environment and to the associates. Now, we determine what is material to our business And where we can have the biggest impact, and that's how we prioritize what we work on. In addition to that, We've made a lot of improvements from a disclosure standpoint over the years. Most recently, we've added both SaaS B and TCFD Frameworks TO Our ESG Report.
In addition to the disclosures provided through GRI and CDP, which we've had for quite a few years. And we think the addition of these 2 really helps round it out when we have CDP, GRI, TCFD and SaaS We know that dialogue is key in continuing to evolve with regards to disclosure, Which is why we're committed to active engagement with our stakeholders.
What is your policy on neonicotinoids?
Good job pronouncing that.
Thank you. I
Hair policy on neonicotinoids. We met our target to phase out the use of neonics on our non citrus plants in 2019. And we researched this for many years before we made that decision, but we made the decision with our suppliers to have substitutes to move away from neonicotinoids. And by the
end of
2019, we had completed that, although there are certain states, mainly California and Florida, That require any citrus tree that is transported across state lines be treated with neodymectinoids And all of those plants that are treated and sent are labeled. And we've been the only retailer That has labeled products that have neonicotinoids treatment. So if you're shopping in store and you see a Plant with it, you'll know that it has been labeled, but there are very, very few of those in our stores, and we have
Thank you, Ron, and thank you everyone for joining us today. Those are all the questions we have. Have a great day.
This concludes today's event. You may disconnect at this time. Thank you for joining and have a wonderful day.