Walmart has announced a goal to eliminate 20 million metric tons of greenhouse gas (GHG) emissions from its global supply chain by the end of 2015. This represents one and a half times the company's estimated global carbon footprint growth over the next five years and is the equivalent of taking more than 3.8 million cars off the road for a year.
The massive undertaking is one that will fall on the shoulders of Walmart’s product suppliers, who will be under additional pressure to reduce the footprint of their products and packages throughout their entire life cycle.
“Energy efficiency and carbon reduction are central issues in the world today,” Walmart president and CEO Mike Duke told an audience during the official announcement event. “We’ve been working to make a difference in these areas, both in our own footprint and our supply chain. We know that we have an opportunity to do more and the capacity to do more.”
The footprint of Walmart's global supply chain is many times larger than its operational footprint and represents a more impactful opportunity to reduce emissions, the retailer notes.
“Like everything we do at Walmart, this commitment ends up coming down to our customers,” Duke added. “Reducing carbon in the life cycle of our products will often mean reducing energy use. That will mean greater efficiency and, with the rising cost of energy, lower costs, making our business stronger and more competitive. And, as we help our suppliers reduce their energy use, costs, and carbon footprint, we’ll be helping our customers do the same thing.”
Walmart is collaborating with the Environmental Defense Fund (EDF) to develop this approach, which looks at the supply chain on a global scale. Other external advisers include PricewaterhouseCoopers, ClearCarbon Inc., the Carbon Disclosure Project, and the Applied Sustainability Center (ASC) at the University of Arkansas. This team will identify projects, quantify reductions, engage suppliers and ensure proper procedures are followed for each GHG reduction claim.
GHG reduction program elements
The program to reduce GHGs has three main components:
• Selection—Walmart will focus on the product categories with the highest embedded carbon. This is defined as the amount of life cycle GHGs per unit multiplied by the amount the company sells. To find the embedded carbon, the ASC reviewed the GHG emissions associated with all Walmart product categories. This approach ensures the project team focuses on the categories that have the greatest opportunity for reductions. Reductions can come from any part of a product’s life cycle.
• Action—For a project to be included as part of this goal, it must reduce GHGs from a product in either the sourcing of raw materials, manufacturing, transportation, customer use or end-of-life disposal. Walmart must demonstrate it had direct influence on the reduction and show how that reduction would not have occurred without Walmart’s participation.
• Assessment—Suppliers and Walmart will jointly account for the reductions. ClearCarbon will perform a quality assurance review of those claims to ensure that methodology, completeness, and calculations are correct. When the claims meet the quality assurance check, PricewaterhouseCoopers will assess under consulting standards whether the defined procedures were followed consistently to quantify the reduction claim.
During the announcement, Fred Krupp, president of EDF noted, “Today the world’s largest company begins a global race for carbon pollution cuts. Walmart’s bold move will help companies identify steps to slash pollution and costs. As this story unfolds, it will transform a vast supply chain here at home, and around the world.”
