Walmart creeps forward on its sustainability goals

Update: This story, originally published Monday, was updated Wednesday to include perspective on Walmart's recycling efforts from its chief financial officer, Charles Holley.

[Editor's note: While many would agree that Walmart is greener than it used to be, has the world's largest retailer gone far enough? For more analysis of Walmart's new sustainability report and results, see GreenBiz Senior Editor Marc Gunther's column, "Has Walmart become a friend of the earth?"]

Walmart is making progress, but still has a long way to go to reach its high sustainability goals, according to its Global Responsibility Report released Monday.

The company in 2005 set goals of being totally supplied with renewable energy, having zero waste and selling products that sustain people and the environment.

In addition, it said in 2010 that it would eliminate 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015. That equals one-and-a-half times the company’s estimated global carbon footprint growth over those five years. And the focus on its supply chain means that Walmart's goals could ripple through broad swaths of the economy.

Since 2010, the company has eliminated more than 120,000 metric tons of emissions -- a growth from the 88,000 metric tons that Walmart (NYSE: WMT) told GreenBiz it had eliminated back in March -- and has identified projects expected to cut emissions by a combined total of 16 million metric tons, according to the report. Examples include collaborating with a supplier to adjust freezer temperatures for so-called "cold chain products," or products that need to be kept refrigerated or frozen, as well as producing palm oil and beef more sustainably.

Of course, 120,000 metric tons represents less than 10 percent of Walmart's goal of eliminating 20 million metric tons of GHGs by 2015. In March, though, a spokesperson for the retailer told us it still believes it can reach its target.

The majority of Walmart's energy usage comes in the form of electricity, although it also uses natural gas and other sources, according to the report. The company said 4 percent of its stores use renewable electricity from its own projects, which yield a total of about 1.1 billion kilowatt-hours. That represents an increase from only 2 percent last year and less than 1 percent in 2007 and 2008.

Part of that growth came from stores in Canada and China completing their first on-site solar installations last year. On top of the renewable electricity from its own projects, 18 percent of the grid electricity that the retailer uses also comes from renewable sources. That's still a far cry from Walmart's ultimate goal of getting 100 percent of its electricity from renewable sources, but it does represent real progress.

Walmart also is making money through recycling. The company reported that it has diverted a whopping 81 percent of its waste from landfills. That helped the company generate $231 million through recycling revenue and savings. The company is still working on the remainder, but said that would be a challenge -- the remaining 19 percent comes mostly from restrooms and parking lots.

In a webcast with top company officials discussing the report Wednesday, Chief Financial Officer Charles Holley said the money Walmart is making from recycling equals the profits from 40 to 50 supercenters. “From a CFO perspective, it’s impressive,” he said.

In addition, Walmart nearly doubled its amount of locally grown produce, defined as fruits and vegetables grown and sold within the same state. That means that 10 percent of the produce sold in U.S. Walmart stores is locally grown, reducing transportation emissions and other impacts.

The company has lower prices for healthier foods and worked with The Sustainability Consortium to develop an index to help buyers evaluate products. It also is looking to buy more from women-owned businesses, according to the report.

The retail giant has faced plenty of criticism. Earlier this month, a different report from the Institute of Local Self-Reliance claimed that new stores built after 2005 -- which aren't included in the carbon-reduction goal -- have added more than twice the amount of carbon emissions that Walmart's other stores have cut. Report author Stacy Mitchell also claims that Walmart's cost-cutting pressure ends up reducing quality, meaning that products don't last as long and consumers end up buying -- and trashing – more items.

Walmart addresses challenges, such as infrastructure and cost, in its lengthy report. Company officials have planned a webcast Wednesday to discuss the report. For more information, go to http://www.walmartstores.com/Sustainability.

Photo of Walmart store by trekandshoot via Shutterstock.