Tractor Supply Company (TSC) targets recreational farmers and ranchers and is the largest operator of retail farm and ranch stores in the United States.
Impacts and Opportunities for companies in the Retailing Industry
According to the U.S. Department of Energy, retail buildings—including stand-alone stores, malls, and shopping centers—account for over 15% of commercial floor space and consume more than 18% of all energy used by commercial buildings. ((U.S. Department of Energy. “Retailer Energy Alliance 2012 Annual Report,” October 2012. Accessed March 17, 2014. http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/rea_annual_report_2012.pdf))
Tractor Supply takes responsibility for the energy consumption at its retail stores. 65% of TSC’s stores use remotely monitored energy management systems, which reduce energy consumption at these stores by an estimated 20%. These systems continue to be rolled out at TSC’s remaining stores. New stores also utilize high efficiency heating and air conditioning systems and compact fluorescent lights, further reducing TSC’s energy consumption at its retail locations by 14%.
According to the Environmental Protection Agency, moving freight within the U.S. accounts for 20% of all the energy consumed in the transportation sector. Together rail and truck transport emits over 350 million metric tons of carbon dioxide annually. The level of emissions are expected to further increase with continued economic growth. ((U.S. Environmental Protection Agency. Transportation Logistics/Supply Chain webpage. Accessed March 17, 2014. http://www.epa.gov/retailindustry/transportation/index.html))
Tractor Supply reports that since 2009, the company has saved 11.3 million gallons of fuel through better utilization of delivery trucks, increased use of rail freight and sourcing products closer to distribution centers and stores.
In-store Take Back Programs
Around the world, legislation based specifically on the concept of producer responsibility is growing. While electronic waste regulations are the most developed, regulations requiring the proper disposal of household hazardous waste are increasing.
Tractor Supply, in partnership withExide, collects used vehicle batteries for recycling. TSC also offers used oil collection and recycling services at its stores.
Areas for Improvement
Through direct communication, Portfolio 21 learned that TSC tracks its environmental key performance indicators, such as energy consumption, greenhouse gas emissions, and waste. However, these metrics are not publicly available. Portfolio 21 has asked the company to publish this information to improve transparency.
Enhanced Supplier Guidelines
Through direct communication, Portfolio 21 learned that TSC does not have any raw material restrictions or supplier guidelines in place. Portfolio 21 has asked the company to develop supplier guidelines that will minimize the company’s environmental risk.
Industry: Consumer Discretionary
Country: United States
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 7/31/14 and may not reflect current opinions or subsequent events.