In this article, sustainability expert Jesse Thorson explains what vendors need to know about Costco compliance for the 2026 Climate Data Survey, including how to prepare emissions and water data, evaluate reporting readiness, and submit a strong response.
As retail supply chains face increasing decarbonization pressures, Costco Wholesale has introduced new reporting requirements for its vendor network with the 2026 Costco Climate Data Survey.
Costco uses the sustainability data it collects from its suppliers to assess its environmental footprint across its entire value chain and, critically, make strategic procurement decisions based on perceived supply chain risks & resiliency challenges.
For Costco suppliers, annual sustainability reporting is a critical element of commercial readiness and relationship management with one of the world’s largest retailers.
This guide is designed to help your organization assess its current data readiness, understand technical expectations, and execute a seamless submission that protects and enhances your standing as a preferred Costco partner.
How to Prioritize Your Costco Compliance Efforts
Before diving into the granular data, it is crucial to understand how to prioritize your reporting efforts. If you are early in your sustainability journey, follow this progression to build a defensible and increasingly mature climate program:
- Start With the Fundamentals
Track energy consumption & water use, establish a concrete baseline year, and complete a full inventory of your Scope 1 and Scope 2 emissions - Expand Your Reporting Boundary
Screen and calculate your Scope 3 (value chain) emissions across all 15 categories to understand your broader impact, collect data for additional years, and assess your water risk. - Establish Targets and Product-Level Data
Set a realistic, time-bound climate target & consider developing lifecycle Product Carbon Footprints (PCF) for specific items sold to Costco, particularly if requested or expected by your specific category buyer. - Strengthen Credibility Through Verification
Acquire third-party verification statements for your GHG inventory and align your PCFs with Costco’s specific expectations & the PACT methodology.
Costco Climate Data Survey Readiness Checklist
How prepared is your organization to hit “Submit”? Use the following checklist to determine your reporting maturity level and identify critical data gaps before accessing the disclosure platform.
Level 1: Foundational Reporting
Level 2: GHG & Water Footprint Maturity
Level 3: Target Setting & Product Carbon Footprints
Level 4: Assurance & Standards Alignment
Key Climate Survey Terms for Costco Vendors
Corporate climate and environmental accounting is filled with dense nomenclature. If this is your first time facing a retail compliance survey, here is what Costco’s core terms mean in practical business terms.
| Term | What It Means | Why Costco Is Asking |
|---|---|---|
|
Scope 1 Emissions |
Direct emissions from sources your company owns or controls (e.g., burning natural gas in your boilers, diesel in your fleet vehicles). | This represents the carbon footprint entirely within your operational control. |
|
Scope 2 (Location-Based) |
Emissions from purchased electricity calculated using average emissions intensity grids for your geographic region. | Reflects the physical reality of the power grids where you operate. |
|
Scope 2 (Market-Based) |
Emissions from electricity adjusted for your specific contractual choices, like purchasing Renewable Energy Certificates (RECs) or green power options. | Demonstrates whether your company is actively purchasing or investing in renewable energy solutions. |
| Scope 3 (Categories 1-15) | All indirect, value chain emissions—from the raw materials you buy (Category 1) to how consumers use and dispose of your products. | Because vendor emissions represent Costco's own Scope 3 footprint, they need this data to track their corporate supply chain impact. |
| Product Carbon Footprint (PCF) | The total greenhouse gas emissions generated across a single product's lifecycle, usually expressed in units like kgCO2e per sell unit. | Allows Costco to more accurately evaluate and compare the true environmental impact of specific items sitting on their warehouse shelves. |
| PACT Methodology (v3) | The global standard established by the World Business Council for Sustainable Development (WBCSD) for calculating and exchanging carbon data across supply chains. | Standardizes product-level calculations so Costco can accurately compare item footprints across different global suppliers. |
| Third-Party Verification | An independent audit conducted by an accredited external organization to confirm that your emissions, water data, or product carbon footprints are accurate and calculated according to accepted global standards (like the GHG Protocol). | To ensure the data they rely on for their own corporate ESG reporting is credible, free from material errors, and protected against claims of "greenwashing." |
| Water Withdrawal | The total volume of water your facility removes from all sources (including municipal tap water, groundwater wells, rivers, or lakes) for any operational use. | To gauge the raw scale of your operations' dependency on local water resources. |
| Water Consumption | The portion of withdrawn water that is permanently lost from the local watershed during production—either because it evaporated, leaked, or was physically incorporated into the product itself. | To assess how much water your manufacturing process actually takes away from the surrounding community's supply. |
| Water Discharge | The total volume of used water that your facility releases back out into the world (whether it goes down the drain to a municipal treatment plant, into a local river, or to a third-party recycler). | To evaluate the volume of wastewater your operations generate and ensure you are managing the water quality. |
| WRI Aqueduct Tool | A publicly available, global water risk mapping tool created by the World Resources Institute. | Helps Costco identify supply chain vulnerabilities related to water scarcity, drought, and wastewater compliance. |
When Should You Work With a Sustainability Consultant?
Many mid-sized and growing suppliers complete basic reporting internally, but certain technical triggers within the 2026 Costco survey heavily benefit from professional sustainability expertise.
If your operations match any of the scenarios below, attempting to self-report without an expert partner risks submitting inaccurate data, failing data validation audits, or signaling a lack of supply chain maturity to Costco category managers.
You should consider retaining an expert consultant if:
-
You have not collected at least one full year’s worth of energy consumption data across your organization.
Third Partners can make your life easier and streamline the data collection process, including estimations where data gaps may occur. -
You have not completed a Scope 1 & 2 GHG footprint.
Your first GHG inventory & baselining sets you up for success in all future reporting cycles. It’s critical to get this right, and the majority of large & growth-stage companies use consulting partners to get on their feet. -
You are missing Scope 3 or Category-Level visibility.
Estimating supply chain emissions across 15 categories requires specialized economic-input-output (EIO) or process-based lifecycle modeling software. If you are simply guessing or putting “0” across major operational categories, it may flag your organization as a high-risk vendor. -
You need Third-Party Verification.
An advisory firm like Third Partners helps prepare your data, acts as the intermediary during an audit, and ensures your greenhouse gas inventory is structured to pass an independent assurance process smoothly. -
You are asked for PACT-compliant PCFs.
Calculating a product carbon footprint that complies with the rigid PACT v3 methodology requires deep knowledge of lifecycle assessments (LCAs). Mistakes here can lead to rejected item disclosures. -
You operate water-intensive facilities or operate in water-stressed regions.
Pulling water data, checking it against geospatial risk indices like WRI Aqueduct, and writing technical narratives regarding wastewater quality management requires specialized environmental engineering inputs.
Costco Compliance Beyond the Climate Data Survey
While the 2026 Climate Data Survey focuses explicitly on greenhouse gas emissions and water usage, it is important to remember that this is only one facet of Costco’s vendor compliance ecosystem. What is deliberately absent from this specific survey are Costco’s rigorous requirements for high-risk commodities.
Costco strictly requires reporting and verifiable traceability for materials with unique supply chain sustainability challenges, such as fiber (including cotton and wood pulp), palm oil, cocoa, and seafood. Ensure your compliance teams do not view the Climate Data Survey in a vacuum; you must be equally prepared to address these material-specific traceability requirements alongside climate reporting to maintain your standing as a preferred supplier.
Prepare a Credible Costco Climate Data Survey Response
The immediate goal is to submit an accurate survey, but the work can create value beyond compliance. Collecting and reviewing environmental data can uncover inefficient equipment, unusual energy use, high operating costs, data-management weaknesses, and exposure to water or supply-chain risks. It can also give your company a stronger foundation for responding to future customer requests.
A complete response supported by clear calculations and documentation shows that your organization is prepared to manage increasingly complex sustainability expectations.
Third Partners helps Costco vendors collect environmental data, calculate GHG inventories, evaluate Scope 3 emissions, assess water risks, develop Product Carbon Footprints, and prepare for third-party verification. Contact Third Partners for a free consultation and get the technical support you need to prepare a credible 2026 Costco Climate Data Survey response.
About the Author: John Haugen
