Why Walmart's Carbon Cuts Will Make a World of Difference
[Editor's Note: Environmental Defense Fund's Elizabeth Sturcken provides this post on Walmart's announcement to slash 20 million metric tons of CO2 from its products' lifecycle and supply chain by 2015. EDF worked closely with Walmart to develop the goal. For more coverage, see GreenBiz.com Senior Contributor Marc Gunther's post and GreenBiz.com]
Archimedes said "Give me a place to stand, and I shall move the earth," when explaining the principle of levers.
Leverage is the big news about Walmart's announcement today. The company has committed to reducing 20 million metric tons of carbon pollution from its products' lifecycle and supply chain over the next five years. That's equivalent to the annual greenhouse gas emissions from 3.8 million cars.
So is Walmart moving the earth? No, not yet. But this is precisely the kind of innovative approach to reducing carbon pollution that we need right now. Environmental Defense Fund worked closely with Walmart to craft this goal and project that makes the most of what Walmart can uniquely do to cut carbon pollution across the globe.
This commitment is bold because:
- Walmart's supply chain is where the action is. It's the biggest possible lever that Walmart could bring to the table. Walmart will work with suppliers to reduce their emissions - which they otherwise might not do -- resulting in positive ripple effects around the globe.
- It prioritizes the biggest opportunities. Walmart is looking at the products that create the most carbon emissions across their lifecycles -- as well as products that are top sellers - and focusing on those first.
- It gets carbon pollution reductions now. There's no waiting for the United States or the world to act.
- It will likely reach ten of thousands of companies around the globe -- companies that would not be required to reduce emissions by national or international regulatory proposals but will greatly benefit from energy efficiency efforts.
- It adds to a drumbeat of clear messaging to suppliers from Walmart that they need to reduce carbon pollution. This commitment follows the Sustainability Index, Product Innovation work with Private Brands and other initiatives.
- It's good for business and good for customers. This project is about Walmart and its suppliers working hand-in-hand to find ways to drive carbon and energy - and cost - out of the supply chain. Walmart customers care about America's energy future. They see tangible value from carbon reductions every time a lower carbon product costs less or uses dramatically less energy once they get it home.
Two Kinds of Change: Simple But Big and Transformational
In this project we will look at two different kinds of opportunities. The first opportunities are simple and relatively small changes that, when coupled with Walmart's scale, become big reductions. The other opportunities are more transformational, where we dive deep and engage an industry or consumers to fundamentally change products or their uses.
DVD packaging is an example of a simple change that adds up because of Walmart's scale.
A couple of years ago, Walmart asked one of its DVD suppliers -- 20th Century Fox -- to be a part of a pilot for our project. They made simple changes to make DVD packaging lighter, which cut energy use by 28 percent and reduced the lifecycle carbon emissions of DVDs sold to Walmart by about 25,000 tons. It had a big multiplier effect, too, because the lighter packages were also used on DVDs sold at other stores, and the change evolved from movies to video games and software too. Small change -- big cumulative effect.
One of the other pilot projects Walmart tried was milk. This is an example of a project that falls into the category of industry transformation. Agriculture contributes 8 percent of the total U.S. carbon footprint, and the dairy industry is a significant contributor.
At Walmart's request, several dairy suppliers analyzed the costs and emissions associated with a gallon of milk, from dairy farm to distribution center. By gathering and looking at the data, we found many opportunities to reduce emissions -- at farms through changes in fertilizer and manure management, at dairy processing facilities through improved energy efficiency and even in the product itself, such as making milk shelf-stable.
Some of these changes are now underway at one of Walmart's suppliers, Dean Foods. We're estimating that this one supplier alone can reduce CO2 emissions by 300,000 tons overall by 2015. If these changes were adopted throughout the dairy industry, we estimate that we could see over 2 million tons of greenhouse gas reductions in the same period.
Will this be easy? To put it simply: No.
Looking deep into the supply chain and across product lifecyles for carbon pollution reduction wins is uncharted territory. The cross-organizational team working on this project has spent months creating a detailed guidance document about what can count towards Walmart's goal, as well as how reductions should be quantified and confirmed. We're committed to making this project as transparent as possible and will be publicly releasing the guidance document within a month for anyone who wishes to comment or share ideas.
Walmart's action today won't eliminate the need for a national and global cap on carbon pollution. These caps are absolutely necessary. We can't solve our pollution problems without them. But negotiations take time, and while the clock keeps ticking, carbon pollution keeps building up in our atmosphere. Today, Walmart has shown that is it not waiting to act to reduce global carbon pollution.
Elizabeth Sturcken is managing director of Environmental Defense Fund's Corporate Partnerships Program. This content is cross-posted on EDF's Innovation Exchange blog.
Image courtesy of Walmart.