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Walmart is aiming for zero emissions by 2040. How will it get there?

The company also said it wants to become "regenerative."

Walmart logo on facade of Walmart Labs office building in Silicon Valley

Retail giant Walmart has been on a sustainability journey for 15 years, and last week became the latest big-name company to disclose plans to reach zero emissions from its global operations by 2040 — without using carbon offsets — and to protect, manage or restore at least 50 million acres of land and one million square miles of ocean by 2030.

“Today, I'm committing Walmart to become a regenerative company dedicated to placing nature and humanity at the center of our business practices,” said Doug McMillon, president and CEO of Walmart, during the Walmart Sustainability Milestone Summit. 

“As the largest retail company in the world, the scale of this commitment is momentous, and sets the tone for one of the most important Climate Weeks we’ve ever run,” said Helen Clarkson, CEO of the Climate Group, in a statement. 

Walmart operates about 11,500 stores in 27 countries, plus e-commerce websites in 10 countries, according to the company website. And for the fiscal year that ended on Jan. 31, 2020, Walmart's total revenue was $524 billion.

“By driving this scale of climate ambition through its supply chain, Walmart is making a big, global contribution to the transition to clean energy and transport,” Clarkson continued. “It won’t be easy, but given the progress we’ve seen Walmart make on renewable electricity through our RE100 program, we have no doubt it can achieve this.”

Members of RE100 include companies that have committed to using 100 percent renewable electricity.

The announcement was among a plethora of other corporate commitments and ambitions declared during Climate Week. And Walmart isn't the only company to have set a net-zero goal in recent years. A new report from by Data-Driven EnviroLab and the NewClimate Institute noted that the number of corporations and governments that have pledged to reach net-zero emissions by 2050 has more than doubled in the past year.

"Companies and investors are talking a lot about the need for business to deliver shared value to everyone, to achieve net-zero, to protect nature," said Elizabeth Sturcken, managing director of the Environmental Defense Fund's EDF+Business. "But in practice, very few companies have laid out clear plans to do the hard work it will take to succeed to succeed at addressing the huge impacts of their product and supply chains."

Walmart has been on its sustainability journey for more than a decade, McMillion said during the summit. So what has the company done in that time within its own operations and with its suppliers? And what will it take to meet this new commitment?

Over the past three years, the company cut 230 million metric tons of greenhouse gases from its supply chain — and it’s urging them to continue delivering on this front with its Project Gigaton initiative. According to its most recent ESG report — released in August — the retailer has diverted 80 percent of its waste materials from landfill and incineration globally, and had a 7.7 percent reduction in Scope 1 and 2 annual emissions, comparing 2018 to a 2015 baseline.

But Walmart has a huge footprint that extends beyond just its own operations. While the company’s zero-emissions commitment is necessary, it might not go far enough because it doesn't include the Scope 3 emissions associated with its value chain. 

Here’s how Walmart said it would reach its 2040 goal:

  • Harvesting enough wind, solar and other renewable energy sources to power its facilities with 100 percent renewable energy by 2035
  • Electrifying and zeroing out emissions from all of its vehicles, including long-haul trucks, by 2040
  • Transitioning to low-impact refrigerants for cooling and electrified equipment for heating in its stores, clubs, and data and distribution centers by 2040

EDF has been Walmart's partner in its sustainability journey from the beginning. "Over the years, we've seen Walmart doing more and stepping higher," Sturcken said. "We know from 30-plus years of working with business that there are countless positive benefits to being a sustainability leader. There are cost savings, public relations benefits, supply chain risk reduction, employee engagement, new product innovation, customer acquisition, and the list goes on."

Sturcken also noted that transforming products and supply chains is hard work, and there are no easy answers for how to make a business sustainable.

"It involves setting ambitious, yet achievable goals, investing in the staff and resources to make those goals happen, reporting transparently. It involves companies like Walmart  sending clear demand signals for sustainable and healthy products, defining what that means at the product level and then rewarding suppliers to meet that demand," she said. "And it also involves addressing the systems change that needs to happen to bring everyone along on that journey." 

Walmart also said it wants to become a "regenerative" company. But what would that mean for the retail giant? 

“Regenerating means restoring, renewing and replenishing. In addition to conserving, it means decarbonizing operations and eliminating waste along the product chain,” McMillon said during the Walmart summit. “It means adopting regenerative practices in agriculture, forest management and fisheries while advancing prosperity and equity for customers, associates and people who participate in our product supply chains.” The company plans to do this work with the Walmart Foundation.

Conservation International CEO M. Sanjayan was also part of the summit conversation and noted that right now, we’re living through an important decade for addressing nature. The organization will partner with Walmart in its nature-based efforts, which could include initiatives centered on biodiversity and ecosystem conservation and restoration. 

“Everything that we rely on from our food, our water, productivity of soils, resilience to climate change, pollinators, all of that comes ultimately from nature,” Sanjayan said. “If you ever needed a reminder of the importance of nature, 2020, unfortunately, has provided us with catastrophic examples.”

EDF's Sturcken noted that Walmart is right to set its sights on addressing the crisis for global natural resources and that the commitments from the Walmart Foundation are a critical part of meeting that goal.

"As always, though, companies must go beyond choosing philanthropy to get to the point where they are driving change into their business," she said. "Until they incorporate these goals deep into their business and make substantive changes to how buyers are incentivized and how suppliers are rewarded, they will not achieve their goal of selling products that sustain people and the planet."

There is a lot of work to do in the years ahead. As my colleague Sarah Golden wrote in her Energy Weekly newsletter last Thursday, the commitments announced last week are the beginning of something: “These companies need to be held accountable for reaching their goals in meaningful ways — and to continue to uplevel their commitments to meet the scale of the climate challenge.”

McMillon acknowledged that the work that needs to be done with addressing the climate crisis requires everyone to show up. “When each of us takes action together, we can bend the curve, but it takes each of us,” he said. “No matter who you are, the role you play matters.”

"There's so much to admire from  Walmart on taking this next step, and really stepping things up on renewables, on their buildings and stores, and also on committing to zero-emission vehicles," Sturcken said. "These steps are huge and transformational. And there is so much work left to be done on the product and supply chain side to truly transform the business."

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