Retailers Make Good Neighbors

Tree-Hugging Home Depot Shakes Up Industry
By Richard Halicks

When you go through the automatic doors of Home Depot to get your wood chipper, gas blower, pressure washer, nail gun, or fence posts, you're walking straight into the globalized economy.

Faucets made in China, timber cut in Canada, tools fabricated in the United States. Home Depot is an acknowledged innovator that grew from an interesting idea in 1978 to a retailing colossus in 2004. Its cash registers bleep in 1,766 stores, and it employs more than 300,000 people on several continents. But nowhere has it gone against the grain more than in its vital wood-products business.

Home Depot wants to have its wood and save the rain forest, too, it says an example of environmental sensitivity being globalized right along with profit motive.

"We took parallel paths," said Ron Jarvis, vice president of merchandising for lumber, in explaining the company's extraordinary wood-purchasing policies. "The first was to understand where every wood product in our store came from, whether it was a 2 by 4, a fan blade or a carpenter's pencil."

The idea was to make sure that the wood wasn't cut in an endangered rain forest or logged illegally elsewhere.

That process took two years, Jarvis said. "The main reason is, if you got a gas grill, and the gas grill company buys a 6-inch handle on the open market from wholesalers or suppliers, who also buy from wholesalers and suppliers, there can be a five- or six-link chain back to the forest."

Some vendors readily responded; others didn't. "If a vendor didn't supply the information, they were replaced," Jarvis said. "To my knowledge there's no retailer in the world today that does that kind of due diligence on its wood-purchasing policy."

The second path, Jarvis said, was to develop expertise on the world's forests, region by region and country by country, and to make some hard and fast rules. As of the end of 2002, the company no longer bought wood from any of the 10 forests listed as endangered by the World
Wildlife Federation; in addition, it decided not to purchase any of 40 species that are believed to be imperiled, including Brazilian rosewood and some types of mahogany.

The policies led the company to cut its purchasing from Indonesian sources, for example, from $450 million to $50 million, Jarvis said, noting that the company buys 95 percent of its wood from sustainable forests in the United States and Canada.