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TJX Companies: Leading the Charge Towards Sustainability in Retail

Updated: Dec 11, 2023

Photo: Associated Press for the June 2017 Wall Street Journal article "How to Survive the Retail Crisis: A Master Class from T.J. Maxx"

The TJX Companies, Inc. (TJX), is a leading off-price retailer of apparel and home fashions in the U.S. and worldwide. Headquartered in Framingham, Massachusetts they have over 4,800 stores across nine countries and three continents, along with 6 e-commerce sites. Statistically, the company has around 329,000 employees, TJX ranked 87th on the Fortune 500 list for 2022 with $49.9 billion in revenue. Brands include well known names like T.J. Maxx, Marshalls, HomeGoods, Sierra, and Homesense. Their mission is to serve a diverse customer base with a rapidly changing assortment of quality, fashion, brand names, and designer merchandise at prices generally 20% to 60% below full-price retailers. This mission is directly aligned with their goal to be a responsible company.

Ernie Herrman - CEO & President, TJX

“For 45 years, TJX’s mission of delivering great value to our customers every day has gone hand-in-hand with our commitment to act as a responsible corporate citizen, invest in our associates and our communities, and operate our business ethically,” said Ernie Herrman, Chief Executive Officer and President in 2022.

TJX's Recent but Quickly Evolving Renewable Energy Journey

This alignment shows up directly in TJX’s goals and strategies when dealing with the environment, which is viewed as being both environmentally responsible and good for business. Their approach has four pillars: achieve operational net-zero emissions by 2040; source 100% renewable electricity by 2030; divert 85% of operational waste from the landfills by 2027; and shift 100% of packaging for in-house developed products to reusable, recyclable or at least to containing sustainable materials by 2030. When the company announced these goals in 2022, Herman added that “I am so pleased with all we have accomplished over the years, and we are by no means done. These new environmental sustainability goals are important to us in terms of our work to mitigate our impact on the environment. We look forward to continuing to enhance our programs and reporting as we move forward.”

Brenna Zimmer - VP, Sustainability, TJX

When looking at the second pillar - sourcing 100% renewable energy, this goal has been evolving since 2017 according to TJX’s 2022 Key Environmental Data & Framework report. When the company began its renewable energy journey, they heavily relied on procuring unbundled renewable energy certificates (RECs). However, since 2018 the company has aggressively sought to procure more impactful renewable energy via green tariffs and direct contracts supported by energy attributes (also known as RECs). This strategy alone has steadily increased from 169K MWh of procured renewable energy from these sources in 2018 to over 429K MHw in 2022. In addition, while the company's total renewable energy strategy continues to include procuring unbundled RECs, which peaked in 2019 and 2020 to 142K MWh and 139k MWh respectively, that now sits at just 29.5K MWh in 2022. This represents a clear desire to have a stronger environmental impact when using their renewable energy procurement process. An example of that can be found when they joined McCormick and Johns Hopkins University in 2019 as buyers in the Skipjack Solar PPA in Charles City County, VA. This allowed TJX to take a portion of both the power and the RECs from the 175 MW solar center project.

The Potential of Procuring RECs with Additionality

While TJX's progress in renewable energy sourcing is commendable, the company could potentially accelerate its progress by incorporating RECs with additionality into its strategy. This would help TJX achieve two goals:

  1. Move away from the use of unbundled RECs in their renewable energy procurement process; and

  2. Strengthen the impact of environmental claims by making their renewable energy procurement process more scalable.

Additionality in the context of RECs refers to the concept that the generation of renewable energy would not have occurred without the revenue from the sale of the REC. In TJX’s renewable energy procurement process RECs with additionality can:

  1. Increase the speed at which TJX can have an impact on the grid’s ability to convert to renewable energy. This is because the revenue from the sale of RECs with additionality can provide supplementary capital for the development of new renewable energy projects;

  2. Increase the scale of TJX’s renewable energy procurement process as it relates to their energy consumption. Presently TJX consumes about 1.7 million MWh of electricity, while mitigating about 460K MWh with renewable energy. Using RECs with additionality would allow them to address that large chunk more quickly than having to consider the next VPPA or PPA on a project by project basis - thus removing the bilateral nature of searching for the right VPPA or PPA. This would be particularly important as TJX’s energy consumption continues to grow;

    1. Equally important, since RECs with additionality can come from many projects as opposed to just one, TJX would have the opportunity to subsidize more than one new renewable energy project at a time. This is because the revenue from the sale of RECs with additionality can provide supplementary capital for the development of one or a number of new renewable energy projects;

  3. Mitigate both costs and effort over time associated with continued renewable energy procurement. This is because the price of RECs with additionality can serve as an indicator to the market of the availability of supplementary capital for project development. These RECs would be more expensive than unbundled RECs, but cheaper than RECs from a VPPA or PPA because they’re helping to bring a project, or multiple projects, to completion that otherwise would not get completed;

    1. Because RECs with additionality are directly similar to procuring RECs from a VPPA or PPA (without taking the power or owning the project), but without the complexity and need to source a single project;

  4. Enable a more impactful marketing claim for sustainability purposes when compared to unbundled RECs. This is because the additionality of a REC can provide evidence that the company's purchase of the REC has led specifically to the generation of net new additional renewable energy; and

  5. Allow TJX to incentivize, or encourage, its suppliers to use RECs with additionality as a way of mitigating their scope 2 emissions, which roll up to TJX as their scope 3 emissions. This could be done through its responsible sourcing program, by giving what invariably smaller companies with less renewable energy buying power access to RECs with additionality in a more cost effective and efficient manner that avoids the need for suppliers to source their own VPPA or PPA.

In conclusion, TJX's commitment to renewable energy and sustainability is clear and is nothing to scoff at. However, incorporating RECs with additionality into its strategy could potentially accelerate its progress and make its sustainability efforts even more impactful. TJX has clearly already made significant progress in transitioning to renewable electricity but it has some opportunities to build on this success. By leading in this manner, TJX can continue to serve as a model for responsible renewable energy procurement in retail.


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