Why Walmart's Project Gigaton gives us hope
Imagine for a moment what it would mean if the world’s biggest brands couldn’t access the key ingredients for their products. What if Starbucks had trouble sourcing coffee? What if Coca-Cola couldn’t access water?
As the predicted effects of a changing climate such as droughts and rising temperatures become a reality, these what-if questions raise serious concerns for global supply chains.
Such issues were foundational for last week’s Walmart Milestone sustainability summit at the company’s headquarters in Bentonville, Arkansas. Our two NGOs have worked with Walmart for years as it pushes to fulfill its ambitious climate commitments.
One of those is Project Gigaton, which in its two-year lifespan has avoided 93 million metric tons of emissions toward the company’s 1-billion-ton goal. It may be the company’s most ambitious sustainability initiative, and we — along with dozens of other advocacy groups — have taken a keen interest in this initiative.
Based on what we saw last week, we’re feeling hopeful. For example, Walmart announced that more than 1,000 suppliers have signed onto Project Gigaton. In addition, Walmart Canada announced that it will join the initiative, bringing with it the next influx of suppliers.
This is significant progress, and it’s no secret why it’s happening. Walmart and the suppliers that have joined Project Gigaton recognize that environmental sustainability is good for both the planet and business bottom lines, in the form of cost savings, risk reduction and resiliency. As a bonus, they are seeing increasing approval from customers, employees and shareholders.
However, for all that promise, the numbers for the larger world of business tell a more worrisome story. While nearly 50 percent of Fortune 500 companies have at least one climate or clean energy goal, according to calculations by World Wildlife Fund (WWF), only 5 percent have goals on the scale science says is needed.
Corporate sustainability leadership includes setting ambitious goals, collaborating to reach scale, supporting smart public policy and accelerating environmental innovation. Here are four best practices we’ve gleaned from Walmart’s progress:
1. Set science-based goals
Whether your company is working on setting its second- or third-generation sustainability goals or setting a goal for the first time, let science be your guide.
A recent United Nations report, written and edited by 91 scientists from 40 countries, explains why this is necessary. The report found that carving out a safer and more prosperous future means keeping global warming to no more than 1.5 degrees Celsius.
If we’re to succeed in this momentous challenge, corporate sustainability goals need to consider this science when setting goals. Here are three examples of companies with science-based goals:
- Target just announced that it is reducing its own emissions 30 percent by 2030 and also requiring that 80 percent of its suppliers set science-based reduction targets by 2023. This is a huge move to address the full range of emissions that are generated by the stores, trucks and products that it sells.
- Last year, McDonald’s announced its own science-based target to reduce greenhouse gas emissions across its supply chain, restaurants and offices, a first for a major restaurant company. As part of this target, McDonald’s is engaging its supply chain in areas where it has the biggest impact and opportunity, including the beef that goes into its burgers. McDonald’s is also engaging its franchisees to reduce emissions at the restaurants.
- Walmart was the first retailer to set a supply-chain carbon reduction goal, which it exceeded in 2015. That early success inspired Walmart to launch Project Gigaton.
Walmart suppliers can learn more about, and sign up for, Project Gigaton here.
2. Collaborate for scale
Setting goals is one thing; reaching them is another.
To reach truly ambitious goals requires collaborating, both inside and outside the private sector. Cities, states, businesses and universities will need to find new ways of working together to usher in the rapid and far-reaching transitions in energy, land use, urban infrastructure and industrial systems. This is starting to happen, including through coalitions such as We Are Still In and others in countries around the world.
Collaborative, systematic approaches such as these are happening in specific sectors as well:
- Energy: Like-minded companies are working to get more renewable energy into the grid by joining the Renewable Energy Buyers Alliance or RE100. Microsoft is a great example of a company working to get more renewables on the grid for everyone.
- Forestry: The "jurisdictional approach" involves companies working together with NGOs and governments on the ground where deforestation is happening to catalyze green economic growth. At last year’s Global Climate Action Summit, Walmart announced its plan to help connect suppliers to jurisdictional initiatives as part of Project Gigaton.
It’s important to note that collaborating for scale can happen only after sustainability action comes from leadership at the top. This can be accomplished by putting sustainability directly into the core business functions.
How can you put sustainability at the heart of your business?
- Start by zeroing in on your operations such as your trucking fleet, energy procurement (aim to go 100 percent renewable) and how you run your factories or make products (designing them to eliminate negative impact).
- Conduct a greenhouse gas inventory and target your biggest impact areas. For example, if you are a food and agriculture company, focusing on your energy use is not good enough — you need to address your impacts at the farm level. The Sustainability Consortium’s toolkits can help you understand the hot spots in consumer product supply chains and to query your supply chain.
- Consider incentives for business units to reduce their footprint or create an internal price on carbon to drive healthy competition in the race to cut emissions and save money.
- Check out the Supply Chain Solutions Center, a one-stop-shop for tailored help, no matter where you are on the journey.
3. Advocate for smart environmental policy
"It’s no longer enough to reduce, or even eliminate, the greenhouse gas emissions in one’s operations and supply chain," said GreenBiz’s Joel Makower, in a new report by EDF. "Today, leadership companies are those that speak up and speak out in favor of ambitious climate policies, and companies will increasingly be held accountable on that score."
Leadership on sustainability requires engaging in public policy — an ingredient that is missing from leading sustainability rankings. Sustainability programs and policy advocacy on climate need to be aligned.The earth doesn’t stand still, and neither should business in responding to protect it.
Changing the policies that shape the geographies where your company operates is a key element to addressing those "what ifs."
Additionally, company lobbying should be in line with a company’s work on sustainability. That means working with your trade associations to ensure they represent your views on climate action, speaking out publicly when they don’t and resigning from associations that lobby against strong climate policies.
4. Innovate, measure your progress and report results
Business as usual will not solve our biggest what-if questions. Business leaders must accelerate environmental innovation. Disruptive technologies give business leaders a chance to scale solutions to their companies’ most urgent environmental challenges.
Once companies have made progress on sustainability goals, leadership also requires the transparent reporting of results. Reporting publicly to CDP is a good step. An additional level of credibility comes from third-party verification of results.
A focus on driving environmental results while achieving business wins sparks progress. And, companies need to engage in continual improvement. The earth doesn’t stand still, and neither should business in responding to protect it.
In this time, when the U.S. federal government has walked away from tackling climate change, it’s up to every company to act now, with speed and scale.