Walmart’s plan to lift a gigaton of carbon from its supply chain
Walmart is doubling down on its climate commitment.
Today, the retail giant announced Project Gigaton, a goal to remove 1 billion metric tons of greenhouse gases from its supply chain by 2030, equivalent to taking more than 211 million passenger vehicles off the road for a year, the company said.
The focus is on Scope 3 emissions — those that are a consequence of business operations but over which it doesn’t have direct control. It is launching an online toolkit for suppliers seeking to better manage energy, agriculture, waste, packaging and deforestation, and to design consumer products with a lower impact — for example, LED light bulbs and apparel that’s washable in cold water.
Every gigaton counts: The entire global carbon emissions from fossil fuel use in 2014 was 9.75 gigatons. Within the next decade, the world must not exceed a carbon budget of 335 gigatons annually in order to limit global warming to 2 degrees Celsius and achieve the Paris Agreement goals.
Managing greenhouse gases in supply chains addresses the gigaton elephant in the room for many companies. According to Trucost, up to 80 percent of an organization’s emissions can be embedded in its supply chain. Walmart already has a goal of reducing Scope 1 emissions — those from sources owned or controlled by the organization — and Scope 2 emissions — from the consumption of purchased energy — by up to 18 percent by 2025. Project Gigaton attacks its remaining — and largest — bucket of emissions.
"We are initially working with 250 of our top global suppliers, working across multiple product categories like food, personal care products, toys, electronics and apparel," Laura Phillips, Walmart Stores, Inc. senior vice president for global sustainability, explained to me in advance of the announcement. "Our goal is to have as many suppliers as want to join in. This is a big tent and there is a part for everyone to play."
The toolkit was intended to be open-source, she said, with a methodology to measure progress and input developed by the partners and NGOs, such as the Environmental Defense Fund (EDF), which has been helping Walmart create sustainability practices since 2005. (See EDF’s separate perspective on Project Gigaton.)
The project also addresses concerns about the transparency of Walmart’s previous sustainability commitments, which often shrouded its supplier evaluation process in an opaque process, even to the suppliers themselves.
The toolkit, Phillips said, is "a digital resource center with the materials, videos and the information we’ve been working on for [over] 10 years in one place. We will be offering that to suppliers so that they can learn what we’ve learned: How do you get started on setting an energy target? How do you work on deforestation? If you’re getting started, we have practical advice, and if you’re experienced, we can help set challenges."
Walmart serves nearly 260 million customers per day in 11,695 stores in 28 countries, with e-commerce in 11 countries. Its impact, and its commitment to sustainably serving the public, is immense.
In the official statement announcing the launch of Project Gigaton, Kathleen McLaughlin, senior vice president and chief sustainability officer for Walmart, said, "We are proud of the improvements we’ve made in reducing our own emissions, but we aim to do more."
The retailer known for selling more began "doing more" on sustainability in 2005, when then-CEO Lee Scott committed the company to three goals: to be supplied by 100 percent renewable energy, to create zero waste, and to sell products that sustain resources and the environment. Project Gigaton is the next step in that journey.
The company claims to be the first retailer to adopt a science-based target emissions reduction plan. In 2009, it introduced the Sustainability Consortium and the Sustainability Index, creating a set of metrics to assess product manufacturers’ sustainability achievements. In 2010, the company committed to eliminating 20 million metric tons of greenhouse gases and exceeded that goal in 2015, eliminating 28.2 million metric tons to date — the equivalent of nearly 6 million car emissions annually. That year, up to a quarter of Walmart’s electricity use globally was supplied by renewable energy.
Also in 2015, Walmart began highlighting companies that scored as "sustainability leaders," which ranged from global brands such as P&G to small family-owned businesses, and dedicated a new section of its website to explaining the designation. The promotion highlighted companies that took action, rather than publicized their stance on sustainability. On Walmart.com, more than 3,000 products are marked with the "Sustainability Leaders" badge.
Supply chains are the new frontier of sustainability. The journey products take from source to shelf will collectively shape our planet’s future.
"Making the Leaders list requires engaging one’s supply chain, perhaps pressing suppliers for new policies and processes that reduce their impacts," wrote GreenBiz executive editor Joel Makower at the time of the 2015 launch.
"Engaging suppliers" is not always enough to get their attention, and Walmart, in typical fashion, is not making use of the Project Gigaton platform mandatory by suppliers. Instead, it is trusting that they will use the newly available database to improve their performance and receive recognition from the retailer.
"In Project Gigaton, we’ll be using the same kind of [survey] tool administered through The Sustainability Consortium, and we’ll be looking at the performance of suppliers and contributions annually," said Phillips. "We also look at leaders and suppliers, whether through supplier summits or special discussions with some of our sustainability leaders."
Project Gigaton brings together many of Walmart's existing supplier programs and incentives, she said.
"What’s new is that we are convening our partners in a way that’s going to create a great moment of accountability and action. We’ve been working on pieces of this, but we haven’t packaged it all together into one program that made it easy for others to interact with us, and we haven’t shared it all. Finally, our suppliers are excited to make new commitments on behalf of Project Gigaton this week."
Land O'Lakes, Inc. was one of the first suppliers to join Project Gigaton, along with six other companies including General Mills. In a statement, Matt Carstens, senior vice president of the Land O'Lakes SUSTAIN program, said the company will assess all of its farmer member-milk supply for emissions, and allocate 20 million acres for fertilizer optimization, soil health and water management. Its target is to reduce 10 million metric tons of emissions by 2025.
Pushing past policy
As it has in the past, Walmart collaborated with NGOs such as World Wildlife Fund (WWF) and EDF to create the business case for why suppliers should commit to Project Gigaton.
"Supply chains are the new frontier of sustainability," Carter Roberts, president and CEO or WWF, said in a statement. "The journey products take from source to shelf will collectively shape our planet’s future. Project Gigaton is a testament to the transformative impact that leaders of industry can have on our greatest common challenges. As more companies follow in the footsteps of Walmart and their suppliers, we can achieve the critical mass needed to address climate change."
According to the EDF, Walmart’s actions also help counter the U.S. government’s efforts to undermine sustainability initiatives, such as cutting funding for the Environmental Protection Agency’s Energy Star program, which labels the top 25 percent of energy-efficient consumer products, saves consumers more than $30 billion a year — and has an impressive 85 percent brand recognition rate.
"Walmart’s audacious goal is an impressive moonshot and shows real leadership in engaging the supply chain," said Elizabeth Sturcken, managing director at EDF, who oversees the organizations Walmart engagement. "It’s critical and needed, especially today when federal governance, in particular, is taking things backward on the environment. Our experience partnering with Walmart over 12 years shows that companies are not going to wait; they need healthy supply chains and a thriving planet to deliver goods that people want every day."
Walmart’s power to make a difference in the consumer market is "unparalleled," she said, but company leadership means engaging many partners to pull their weight.
"Setting goals is easier than the execution and delivery, which can make or break you," Sturcken said. "A massive project like Project Gigaton will take a village with the slew of companies that make up their supply chain. Walmart has incredible scale, but can’t achieve the Project Gigaton goal on their own."