Wal-Mart Urging Suppliers to Cut Greenhouse Emissions

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Wal-Mart Urging Suppliers to Cut Greenhouse Emissions

The world’s largest retailer is calling on its suppliers to help it eliminate 20 million metric tons of greenhouse gas (GHG) emissions from the global supply chain by the end of 2015 via a three-pronged program targeting selection, action and assessment.

While suppliers won’t be forced to make the changes that represent the equivalent of taking 3.8 million cars off the road for a year, Bentonville, Ark.-basedWal-Mart Stores said it would work with them to reduce both emissions and costs as part of its own efforts currently under way to reduce its own emissions with more energy-efficient stores and other related initiatives.

Collaborating with the Environmental Defense Fund (EDF) and other environmental experts to measure reduction, Wal-Mart president and CEO Mike Duke said the company needed to push for greater efficiency to maintain a competitive edge as it expands globally in a period of high-energy costs. “Energy efficiency and carbon reduction are central issues in the world today,” said Duke. “We’ve been working to make a difference in these areas, both in our own footprint and our supply chain. We know that we have an opportunity to do more and the capacity to do more.”

“Like everything we do at Walmart, this commitment ends up coming down to our customers,” Duke added. “Reducing carbon in the life cycle of our products will often mean reducing energy use. That will mean greater efficiency and, with the rising cost of energy, lower costs, making our business stronger and more competitive. And, as we help our suppliers reduce their energy use, costs and carbon footprint, we’ll be helping our customers do the same thing.”

Aside from the EDF, other external advisers working with Wal-Mart to develop its global supply chain scale include PricewaterhouseCoopers; ClearCarbon, Inc.; the Carbon Disclosure Project; and the Applied Sustainability Center (ASC) at the University of Arkansas, all of which will identify projects, quantify reductions, engage suppliers and ensure proper procedures are followed for each GHG reduction claim.

“Today, the world’s largest company begins a global race for carbon pollution cuts,” said Fred Krupp, EDF president. “Walmart’s bold move will help companies identify steps to slash pollution and costs. As this story unfolds, it will transform a vast supply chain here at home, and around the world.”

The three main components of the mega-retailer’s push to reduce GHGs include:

—Selection: Walmart will focus on the product categories with the highest embedded carbon. This is defined as the amount of life cycle GHG emissions per unit, multiplied by the amount the company sells. To find the embedded carbon, the ASC reviewed the GHG emissions associated with all Walmart product categories. This approach ensures the project team focuses on the categories that have the greatest opportunity for reductions. Reductions can come from any part of a product’s life cycle

—Action: For a project to be included as part of this goal, it must reduce GHGs from a product in either the sourcing of raw materials, manufacturing, transportation, customer use or end-of-life disposal. Walmart must demonstrate it had direct influence on the reduction, and show how that reduction wouldn’t have occurred without Walmart’s participation

—Assessment: Suppliers and Walmart will jointly account for the reductions. ClearCarbon will perform a quality assurance review of those claims to ensure methodology, completeness and calculations are correct. When the claims meet the quality assurance check, PricewaterhouseCoopers will assess under consulting standards whether the defined procedures were followed consistently to quantify the reduction claim.

For more information, visit walmartstores.com/greenhousegas.