Home Depot’s strategy for corporate social responsibility (CSR) and environmental, social, and corporate governance (ESG) goals involve multiple prongs and programs. The success of this ESG/CSR strategy contributes to corporate image and brand strength, which helps protect the business against the strong competitive forces indicated in the Five Forces analysis of Home Depot. The company’s CSR/ESG strategy considers the corporate citizenship trends among competitors, like Lowe’s and Ace Hardware, as well as Costco Wholesale, Amazon, and Walmart. The ESG/CSR programs of other retailers, such as Aldi and Whole Foods Market, which are not direct competitors, also influence the development of Home Depot’s programs for sustainability and corporate citizenship.
Home Depot Stakeholders. The major stakeholder groups interested in Home Depot’s business are employees, customers, suppliers and their human resources, communities, and investors. Employees aim for competitive compensation and benefits, while customers expect quality home-improvement products. On the other hand, suppliers aim for business growth along with Home Depot’s growth, and communities are interested in benefiting from the company’s social contributions. Investors benefit from the company’s growth and profitability in the home improvement retail market. The Home Depot Foundation facilitates the funding and human resources needed for many of the CSR/ESG programs for these stakeholders. These corporate social responsibility programs support the goals of Home Depot’s mission and vision regarding service quality, shopping experience, and other factors that impact stakeholders.
Home Depot’s CSR/ESG Programs & Strategy
Home Depot’s programs for its corporate social responsibility strategy manage the influence of stakeholders’ interests by prioritizing human resources, sustainability, and the social environment external to the business. Home Depot’s ESG/CSR strategy has three focus areas:
- Focus on our people (employees and business partners)
- Operate sustainably (business and supply chain)
- Strengthen our communities
Focus on our people. Home Depot’s corporate social responsibility encompasses the needs and interests of human resources, especially the company’s workers or associates. For these stakeholders, the company has ESG programs for the workplace and for employees’ concerns outside the home improvement retail business. This focus area involves the following CSR/ESG programs and initiatives for Home Depot’s workers and related human resources:
- Safety, cash awards, and benefits
- DEI and learning and development
- The Homer Fund
Home Depot has safety measures and standards, as well as cash awards and benefits for its workers. These safety standards are also set for suppliers, such as the manufacturers of house construction tools. On the other hand, diversity, equality, and inclusion policies are followed in Home Depot workplaces and used as guidelines for suppliers. The company’s ESG/CSR strategy also has learning and development programs that support its employees’ career development in the home improvement retail industry. Furthermore, The Homer Fund provides scholarships for Home Depot employees’ children, and financial support for employees during emergencies.
These people-focused ESG/CSR programs support the interests of employees and suppliers as stakeholders in the home improvement retail business. These programs ensure quality service, which is a competitive advantage considered in the SWOT analysis of Home Depot. For example, learning and development programs improve employees’ knowledge, skills, and abilities that contribute to business competitiveness based on better services and a satisfactory shopping experience for customers. To maximize the actual benefits of these CSR/ESG programs, Home Depot’s work culture (company culture) encourages safety and learning in the workplace to achieve excellent service and performance.
Operate sustainably. Sustainability is a core factor in Home Depot’s ESG/CSR strategy. Sustainable retail operations support the company’s corporate citizenship and efforts to satisfy stakeholders, with emphasis on emission reduction and waste minimization. This focus area of Home Depot’s corporate social responsibility strategy includes the following programs:
- Emission reduction and supply chain improvements
- Responsible sourcing
- Green products, circularity, and sustainable packaging
Emission reduction applies throughout the business, including Home Depot’s supply chain. The company’s sustainability targets also include increasing supply chain efficiencies to improve the retail business impact on the environment. On the other hand, responsible sourcing in Home Depot’s CSR/ESG strategy is included to ensure that suppliers are aligned with the company’s corporate citizenship goals. For example, the company ensures that its wood products do not involve endangered forests and regions. Moreover, Home Depot’s sustainability approach for its finished products include green selection, product circularity, and sustainable packaging. This ESG/CSR approach means that the company’s corporate citizenship goals extend beyond sales and include post-purchase sustainability affecting stakeholders.
Supply chain improvements in this CSR/ESG focus area are supported through Home Depot’s operations management efforts for efficient supply chain management. Also, the sustainability and efficiency achieved through these CSR/ESG programs contribute to cost-effective operations, especially in terms of minimizing waste in retail business operations. Thus, the resulting sustainable operations help facilitate the cost and growth targets based on Home Depot’s competitive strategy and growth strategies.
Strengthen our communities. Home Depot’s corporate social responsibility programs support various communities that can benefit from the business. These communities are stakeholders interested in the company’s beneficial involvement beyond its business operations in home improvement retail. In this CSR/ESG focus area, Home Depot has the following programs:
- Support for veterans
- Disaster relief
- Scholarship and training programs
The Home Depot Foundation provides funding and human resource support for home improvement and for facilities serving veterans. The company also includes disaster relief in its CSR/ESG efforts, such as preparedness, response, and recovery activities for communities. Home Depot helps mobilize volunteers and relief supplies for communities affected by disasters. On the other hand, the company offers scholarships and skills training relevant to the home improvement industry to create career opportunities for communities and improve this stakeholder group’s potential socioeconomic development.
Through these community-focused programs, Home Depot’s corporate social responsibility strategy contributes to community development and resilience. As stakeholders, communities benefit as the company grows and expands its operations in the home improvement retail market. These programs also function as public relations that support the company’s branding and promotion, thereby linking this CSR/ESG strategy to Home Depot’s marketing mix (4P).
How Home Depot’s Sustainability & Corporate Citizenship Impact Stakeholders
Home Depot’s stakeholders are accounted for in the company’s strategy for corporate social responsibility. Safety, cash awards, benefits, learning and development, and The Homer Fund meet employees’ interests. Home Depot’s safety and sustainability guidelines and policies help the stakeholder group of suppliers. Various programs, like scholarships and disaster relief, support communities. On the other hand, the interests of customers and investors are indirectly addressed through Home Depot’s CSR/ESG programs. For example, workplace safety programs also benefit customers while they shop at the company’s stores. Also, Home Depot’s sustainability efforts contribute to business process efficiency and profitability, which benefits the stakeholder group of investors. Thus, the company’s ESG/CSR strategy directly meets the interests of employees, suppliers, and communities, and indirectly satisfies the interests of investors and customers. Many of the programs included in this corporate social responsibility strategy meet stakeholder interests regarding one or more of the external factors evaluated in the PESTEL/PESTLE analysis of Home Depot.
References
- Homer, S. T., Yee, K. V., & Khor, K. S. (2023). Developing a measurement instrument for perceived corporate citizenship using multi-stakeholder, multi-industry and cross-country validations. Quality & Quantity, 57(1), 277-300.
- Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15(5), 3892.
- The Home Depot Foundation.
- The Home Depot, Inc. – Corporate Governance.
- The Home Depot, Inc. – ESG Investors.
- The Home Depot, Inc. – Form 10-K.
- The Home Depot, Inc. – Responsibility.