Walmart: 'It doesn't matter who occupies the White House'
On Nov.4, just a few days before the U.S. presidential election, the science-based targets movement officially went mainstream.
It was the date the world's largest retailer, Walmart, announced an emissions reduction plan approved by the Science Based Targets Initiative (SBTI) to cut greenhouse gas emissions by 18 percent by 2025, compared to 2015 levels, and source 50 percent renewable energy by the same date.
Walmart was just the 26th company to get the seal of approval from the SBTI, and the first retailer to secure the accolade. It was seen as a major coup for the SBTI to land the world's largest retailer less than two years after the scheme's launch, but why was Walmart so keen to jump on board?
It was the "increased emphasis" in the corporate world on science-based targets, including from its own suppliers, that convinced Walmart to take the leap, Fred Bedore, senior director of business strategy and sustainability at Walmart, told BusinessGreen.
"Many leading suppliers of ours and other businesses large and small have really seen the value of working to improve the resilience and address these issues of emissions further back in the supply chain, because they understand that it makes good business sense," he explained. "And seeing the framework that was developed around science-based targets and the number of stakeholders of ours that we have worked with historically that were involved, we took a hard look at it and decided ultimately it was right for us to set one."
Walmart is no stranger to sustainability goals. In 2005, then-CEO Lee Scott announced an aspirational goal of sourcing 100 percent renewable energy, as well as plans to double its fleet efficiency in the U.S. by 2015 and cut greenhouse gas emissions by 20 percent. It met the two latter goals in 2015 and 2013 respectively, and as of December 2015 sources 25 percent of its energy from renewables.
Five years later, in 2010, it pledged to cut 20 million metric tons of greenhouse gas emissions from its global supply chain by 2015, a target it met ahead of the deadline.
It was the increased emphasis in the corporate world on science-based targets, including from its own suppliers, that convinced Walmart to take the leap.
But science-based targets are a different kettle of fish to voluntary goals. The initiative is backed by a partnership between the CDP, WRI, WWF and the U.N. Global Compact, which works with corporations to set ambitious emissions reduction targets consistent with the global effort to keep average temperature increases well below the 2 degrees Celsius threshold set out in the Paris Agreement. All targets are closely reviewed by the initiative's team of experts who approve the targets based on strict scientific criteria.
For Walmart, and other companies whose emissions are rooted heavily in their network of suppliers, targets must cover not only their own operations but also their supply chain — otherwise known as Scope 3 emissions.
In line with this requirement, Walmart also has promised to slash 1 billion tons of emissions from its supply chain by 2030, the equivalent of taking 211 million cars off the roads for a year. It's quite a step up from its previous target of 20 million tons of supply chain emissions reductions — so how does it plan to meet the target?
According to Bedore, it will mean accelerating action in the areas of its supply chains that have the highest emissions levels: primarily agriculture; industrial manufacturing; and consumer use.
The good news, however, is that having already been introduced to Walmart as a company pursuing emissions reductions, its suppliers are ready and willing to work with the retailer on the new target, he claimed. "We've been doing this for a while, so when we go to suppliers and we talk to different stakeholders in the supply chain it's not a surprise to them to hear Walmart talking about issues whether its emissions or waste reduction, waste diversion," he said. "So we are able to lead with that and it's no surprise to them."
"We know that it makes business sense and so do they," he added, pointing again to the fact that major suppliers such as General Mills, Coca-Cola and Kellogg have also set science-based targets. "We are seeing an alignment of their priorities and our priorities."
Therefore a lot of the work to come in Walmart's supply chain will be focusing on extending the schemes put in place under the previous target.
For example, in 2014 it teamed up with some large suppliers, including General Mills and PepsiCo, to roll out its "Climate Smart" agriculture program to help farmers reduce their climate impact by optimizing fertilizer using soil and weather data. This program is already scaling among row crop farmers of produce such as corn and soy — from 10 million acres two years ago to more than 20 million acres today — and Bedore says Walmart is now exploring ways to apply the same optimization principle to other agricultural emission hotspots, such as animal emissions.
For Walmart, and other companies whose emissions are rooted heavily in their network of suppliers, targets must cover not only their own operations but also their supply chain.
Meanwhile, the growing success of the "smart home" is driving the rollout of more energy efficiency products to help cut emissions from consumers once finished goods get into the home. Bedore said Walmart plans to expand the range of LED lightbulbs and other energy saving devices in its homeware and electricals departments, in part because the cumulative emissions savings offered by encouraging consumers to switch to more efficient devices are a major boost towards the supply chain goal.
"Those kinds of things are huge because of the lifetime of some of the electronics and things used in people's homes are used over a number of years, so those tonnes really start to add up," Bedore explained.
Of course, although Walmart may have made headlines in early November with its ambitious new commitment, it was nothing compared to the media earthquake Nov. 8 when Republican nominee Donald Trump's presidential win astonished the world.
Trump's election sent shockwaves through a green economy, concerned for the future of environmental policy and investment under a president who has promised to reignite America's struggling coal industry and pull the U.S. out of the Paris climate change agreement.
But for Walmart's environmental ambitions, the controversial new occupant of the White House is not a cause for concern.
"We are doing what we set out to do almost 12 years ago now, and that's set ambitious goals because it's good for our business. And we are going to keep doing what we are doing regardless of the administration in the White House," said Bedore. "We started this [sustainability journey] back when President George W. Bush was in the White House.... It doesn't matter who occupies the White House, that's not the point. The point is that we are driving efficiencies that make sense for our business and there happens to be a benefit for people and the planet as well."
Bedor still envisions a substantial rollout of new renewable energy capacity under Trump — which will be necessary if Walmart is to hit the 2025 goal to source half its energy from clean sources — and insists the main driver for its actions is not political will, but whether low-carbon investment makes business sense.
We are doing what we set out to do almost 12 years ago now, and that's set ambitious goals because it's good for our business.
Walmart's decision to adopt science-based targets as the driving force for its decarbonization approach supports this view. The Paris Agreement may have set a favorable context for climate action, but the involvement of key suppliers ultimately led Walmart to set its own science-based targets, safe in the knowledge it would have the backing of major market partners as it strives to achieve deep emissions reductions.
It may well have the same impact on others, sending a ripple effect through the market as other corporates see the gathering momentum and jump on board. Nov. 8 may have delivered a political earthquake for the U.S., but science-based targets could turn out to be a climate action snowball that keeps on rolling well after Trump's White House residency expires.
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