Home Depot investors have sent a resounding message to the company that its wood sourcing standards need a major overhaul.
In a near two-thirds shareholder vote at the Home Depot Annual General Meeting, investors challenged the Home Depot Board of Directors and approved a resolution by Green Century Capital Management calling on the company to assess how it can address deforestation and forest degradation irreplaceable primary products in its supply chains. As we come from the second shareholder resolution on the forest ever passed, and the first in the lumber industry, 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 non-alignment of its wood purchasing policy with the environmental realities of the 21st century. The Home Depot has applied its DIY ethic where it doesn’t belong — to its wood supply — by abdicating responsibility for ensuring sustainable forest standards and failing to track or disclose its impacts on forests. As 59 environmental organizations recently wrote to Home Depot CEO Ted Decker, Home Depot “profits from the destruction of irreplaceable and ecologically vital forests, rather than working to align its sourcing with a climate-safe future.”
The Home Depot policy, which has remained virtually unchanged for the past 20 years, is a relic that fails to meet even basic sustainability and human rights standards, as pointed out by the NRDC and other NGOs in a note to investors. In the absence of clear actions or commitments, the policy provides no safeguards to prevent the company from sourcing from climate-critical primary and old-growth forests, promoting habitat erosion for endangered species or violate the rights of indigenous peoples.
From its 2x4s and wood paneling to its chairs, doors and cabinets, The Home Depot’s driveways are an emporium of forest destruction, implicating the company – and, unwittingly, its customers – in the loss of forests that are vital to achieving international climate goals. This includes Canada’s boreal forest, the largest remaining primary forest and the most carbon-dense ecosystem in the world. It is also one of the most endangered. Each year, the logging industry clearcuts more than one million acres of boreal forest, much of it in primary forest. This logging leads to catastrophic impacts on climate and biodiversity and has elevated Canada to the ignominious distinction of ranking third in the world in the loss of intact forest landscapes. Almost every province in Canada also lacks fundamental Indigenous rights protections, which means that without its own standard, Home Depot cannot guarantee that its products do not come at the expense of the right of Indigenous communities to dictate the future. of their territories.
Rather than respond to Green Century’s resolution with long-awaited action, The Home Depot Board of Directors chose to to oppose measure, doubling down on its approach of obfuscation, denial and deviation. The company even included a misleading representation in its proxy statement of its relationship with environmental NGOs that prompted NRDC, Greenpeace and Rainforest Action Network to send a letter to the Home Depot CEO.
In contrast, Home Depot’s biggest competitor, Lowe’s, OK, 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 the CLIP requirements for its suppliers. While Lowe’s standard also fails to meet basic sustainability and human rights requirements, its voluntary commitment to this report and its stricter transparency practices put it clearly ahead of Home Depot.
This investor vote is not just a rebuke to Home Depot management, but a signal to the wider market that the corporate repeal of forest and human rights standards is not just a environmental responsibility, but financial responsibility. In the face of new national and international legislation on the protection of climate-critical forests, growing recognition by the scientific and international community of the need to protect forests globally, and growing consumer expectations for sustainable sourcing, companies that fail to implement strong forest protections will increasingly fall out of step with market realities.
The Home Depot came to a head more than 20 years ago when, following calls from environmental NGOs and the public, it first created its wood purchasing policy. But after two decades of neglect, this policy has fallen into disuse and no longer stands up to the realities of today’s environmental crises. As a result of this historic investor vote, The Home Depot has a clear mandate to put the company’s wood supply on a new, more sustainable footing.