Climate activists gathered at Costco’s Washington state headquarters on Wednesday with a congratulatory card and cake for the company’s newly appointed chief executive officer, along with a clear demand to drop Citibank as the financial institution for the Costco credit card.
Braving a cold and rainy morning, about 18 activists called on CEO Ron Vachris to end Costco’s partnership with Citi because of the bank’s outsized contributions to the climate crisis.
With over $330 billion financing fossil fuels from 2016 to 2022, Citi was the second biggest fossil fuel-financing bank in the world according to a report from Banking on Climate Chaos—second only to JPMorgan. In 2022 alone, the bank ranked fourth. Citi currently hosts Costco’s members-only credit card. The activists, led by grassroots climate organizations Third Act, Stop the Money Pipeline and others, delivered a petition signed by 40,000 people, including 18,000 Costco members, to the company’s headquarters office, demanding that the company drop Citi.
The action on Wednesday at Costco headquarters was framed as a joyful celebration for Vachris, who was promoted to CEO on Jan 1. Vachris, who was promoted from chief operating officer, started out at Costco’s predecessor, Price Club, as a part-time forklift driver around 40 years ago. The organizers brought party hats and balloons and danced while singing a version of Kool & the Gang’s “Celebration” with the lyrics, “Citibank, goodbye,” replacing “celebrate good times!” A large card read, “Congrats on CEO, Ron! Don’t let Citibank ruin the party…or the climate!” Signs, speeches and chants riffed on Costco’s values statement, “do the right thing.”
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“We want to keep supporting you,” said Third Act member and loyal Costco shopper Anne Shields. “Do the right thing, and tell Citibank to divest from fossil fuels or you’re going to take your business elsewhere.”
Costco—a membership-based wholesale shopping chain known for selling bulk goods at relatively affordable prices—is the third largest retailer in the country. Roughly one-third of U.S. shoppers hold Costco memberships, according to Business Insider. Costco currently partners with Citi to offer a credit card with cashback deals and perks only available to its members.
At the time of publication, Citi had not yet provided comment on the demonstration. In a public letter issued in January 2022, the bank’s CEO said that “tackling climate change will require tremendous collaboration from everyone—our clients, industry peers, investors, NGO partners, and in particular, governments around the world. There is a critical need for strong public policy to accelerate the global economy’s transition to net zero.”
As the global climate movement continues to call out big banks for financing fossil fuel projects, Third Act campaign strategist Deborah Moore said targeting Citi through Costco is an experiment to find out if big corporate partners can successfully pressure banks to divest from fossil fuels.
“We need to build our power to get the banks to really listen. They’re not changing fast enough,” Moore said. “We want big clients of the banks, big companies, to use their influence.”
The Costco campaign began over a year ago, when Third Act member Chris Goelz looked through his wallet and realized that his trusted Costco credit card was affiliated with Citibank. Goelz said he was working to sever ties with any banks that were heavily financing fossil fuels. He thought about simply disposing of his own credit card, but realized that targeting Costco’s partnership could have a much greater impact.
Goelz said he brought the idea up at the inaugural meeting of Third Act’s Washington chapter, in 2022. Over the course of a year, Goelz and other Third Act members began reaching out to Costco about the Citibank partnership. Goelz even became a Costco shareholder, thinking it would make him more persuasive to the company, which he said has previously been movable on climate.
“We’re targeting Costco because we believe them [saying] that they care,” Goelz said. “They’ve done a lot of work in all other areas and for whatever reason, this banking relationship is one that they just refuse to take a hard look at.”
In 2022, Costco set new targets for reducing greenhouse gas emissions, after pressure from shareholders, including a 69.9 percent shareholder vote in favor of the goals proposed by the Green Century Fund, an environmental impact investing firm.
Costco initially tried to get out of including the proposal with the targets in its shareholder meeting by filing a request for exclusion with the Securities and Exchange Commission. Soon after, the SEC released a legal bulletin explaining that proposals including targets to address climate change would not be excludable and Costco withdrew its request.
Activists at the headquarters referenced these targets, as well as Costco’s past commitments to ethical sourcing and fair employee benefits and wages, as evidence that the company might be likely to heed calls for climate action.
For Bill McKibben, the bestselling author of environmental books and founder of Third Act, targeting Costco is personal. McKibben’s father grew up in Kirkland, where Costco was founded, and his grandfather was mayor of the city. McKibben said he thinks Costco is a good company with a decent record.
“It’s fun to be dealing with a company that you don’t hate,” said McKibben, who also helped found the international climate network 350.org. “It’ll be an interesting test as to whether [it’s] possible to engage with non-evil players, and see if they’ll clean up their act in the places where they are, I think mostly unwittingly, doing a lot of damage.”
Third Act and Stop the Money Pipeline partnered with TopoFinance, a Seattle-based organization focused on financial transformation, to estimate how Costco’s banking might be increasing its emissions. In a new report, Topo Finance found that Costco’s cash emissions—or the emissions derived from its banking practices—are equivalent to an additional 2.3 percent of the company’s total emissions, including from the products it sells, like gasoline, or an additional 85.3 percent of its operational emissions.
In the Carbon Bankroll Report TopoFinance released in 2022, it detailed how even while many of the world’s biggest companies make climate commitments and seek to reduce their emissions, they’re overlooking one of their largest climate impacts: banking. Due to widespread lending from the world’s major banks to the fossil fuel industry, any company (or individual) with money sitting in the bank is likely driving up emissions, TopoFinance said.
“Even for a company like Costco that has an enormous, very sizable carbon footprint, their banking emissions are still one of their largest sources of emissions,” said Paul Moinester, founder and executive director of TopoFinance. “It just goes to show that where companies bank and invest is an incredibly important climate decision for every company.”
McKibben founded Third Act in 2021 to organize Americans over 60 for climate action. Targeting banks engaged in fossil fuel finance is central to Third Act’s work, Moore said, pointing out that older Americans hold disproportionate wealth in the U.S., and can bring added pressure to banks they’ve been loyal to for decades.
“We want to have the backs of youth climate activists,” Moore said. “We have political power and we have structural power in our society, and we want to use that power to support the next generation who are fighting for their future.”
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In addition to Third Act and Stop the Money Pipeline, organizations representing a wide range of demographics co-sponsored the petition, among them Green America, New York Communities for Change, Stand.earth, Oil & Gas Action Network, Climate Defenders, Friends of the Earth Action, Elders Climate Action, Hip Hop Caucus, Climate Action California and People Power United.
The activists delivered the petition to the front desk of the Costco headquarters on Wednesday, and called on Costco employees watching from the windows to join them for cake. On Thursday, Costco will have its annual shareholder meeting, where the activists plan to show up to once again make their case to Costco’s leadership.
“I’m just a single Costco customer and a very small shareholder,” Goelz said at Wednesday’s action. “But I think I can say this: We don’t wanna be out here in the cold, Ron, we want to be inside working with you to try to extricate Costco from its relationship with Citi.”
Prior to 2016, Costco’s credit card operated through American Express. Moore said that activists have suggested some alternatives for Costco’s partnership with Citi, citing the online bank Synchrony—which partners with Costco’s competitor Sam’s Club—or Comenity Bank, which holds several large retail credit card partnerships.
Thursday’s shareholder meeting won’t just deal with activists pushing the company to end its business with Citibank. The National Center for Public Policy Research—a conservative think tank that has been criticized for promoting climate denial—also submitted a proposal to roll back the climate progress won in 2022. Costco’s Board of Directors unanimously opposed the proposed rollback and recommended shareholders vote against it. Still, regardless of whether Costco cuts ties with Citibank, its credit card will still drive emissions. Among its most popular benefits are discounts on gasoline.