Why Walmart's Carbon Commitment Can Make Such a Difference

Archimedes said "Give me a place to stand, and I shall move the earth," when explaining the principle of levers.

Leverage is the big news about Walmart’s announcement today. The company has committed to reducing 20 million metric tons of carbon pollution from its products’ lifecycle and supply chain over the next five years. That’s equivalent to the annual greenhouse gas emissions from 3.8 million cars.

So is Walmart moving the earth? No, not yet. But this is precisely the kind of innovative approach to reducing carbon pollution that we need right now. Environmental Defense Fund worked closely with Walmart to craft this goal and project that makes the most of what Walmart can uniquely do to cut carbon pollution across the globe.

This commitment is bold because:

  • Walmart’s supply chain is where the action is. It’s the biggest possible lever that Walmart could bring to the table. Walmart will work with suppliers to reduce their emissions – which they otherwise might not do – resulting in positive ripple effects around the globe.
  • It prioritizes the biggest opportunities. Walmart is looking at the products that create the most carbon emissions across their lifecycles – as well as products that are top sellers – and focusing on those first.
  • It gets carbon pollution reductions now. There’s no waiting for the United States or the world to act.
  • It will likely reach ten of thousands of companies around the globe – companies that would not be required to reduce emissions by national or international regulatory proposals but will greatly benefit from energy efficiency efforts.
  • It adds to a drumbeat of clear messaging to suppliers from Walmart that they need to reduce carbon pollution. This commitment follows the Sustainability Index, Product Innovation work with Private Brands and other initiatives.
  • It’s good for business and good for customers. This project is about Walmart and its suppliers working hand-in-hand to find ways to drive carbon and energy – and cost – out of the supply chain. Walmart customers care about America’s energy future. They see tangible value from carbon reductions every time a lower carbon product costs less or uses dramatically less energy once they get it home.

Two kinds of change: Simple but big and transformational
In this project we will look at two different kinds of opportunities. The first opportunities are simple and relatively small changes that, when coupled with Walmart’s scale, become big reductions. The other opportunities are more transformational, where we dive deep and engage an industry or consumers to fundamentally change products or their uses.

DVD packaging is an example of a simple change that adds up because of Walmart’s scale.

A couple of years ago, Walmart asked one of its DVD suppliers – 20th Century Fox – to be a part of a pilot for our project. They made simple changes to make DVD packaging lighter, which cut energy use by 28% and reduced the lifecycle carbon emissions of DVDs sold to Walmart by about 25,000 tons. It had a big multiplier effect, too, because the lighter packages were also used on DVDs sold at other stores, and the change evolved from movies to video games and software too. Small change – big cumulative effect.

One of the other pilot projects Walmart tried was milk. This is an example of a project that falls into the category of industry transformation. Agriculture contributes 8% of the total U.S. carbon footprint, and the dairy industry is a significant contributor. At Walmart’s request, several dairy suppliers analyzed the costs and emissions associated with a gallon of milk, from dairy farm to distribution center. By gathering and looking at the data, we found many opportunities to reduce emissions – at farms through changes in fertilizer and manure management, at dairy processing facilities through improved energy efficiency and even in the product itself, such as making milk shelf-stable.

Some of these changes are now underway at one of Walmart’s suppliers, Dean Foods. We’re estimating that this one supplier alone can reduce CO2 emissions by 300,000 tons overall by 2015. If these changes were adopted throughout the dairy industry, we estimate that we could see over 2 million tons of greenhouse gas reductions in the same period.

Will this be easy? To put it simply: No. Looking deep into the supply chain and across product lifecycles for carbon pollution reduction wins is uncharted territory. The cross-organizational team working on this project has spent months creating a detailed guidance document about what can count towards Walmart’s goal, as well as how reductions should be quantified and confirmed. We’re committed to making this project as transparent as possible and will be publicly releasing the guidance document within a month for anyone who wishes to comment or share ideas.

Walmart’s action today won’t eliminate the need for a national and global cap on carbon pollution. These caps are absolutely necessary. We can’t solve our pollution problems without them. But negotiations take time, and while the clock keeps ticking, carbon pollution keeps building up in our atmosphere. Today, Walmart has shown that is it not waiting to act to reduce global carbon pollution.

Read more about Walmart’s commitment and view the webcast of the announcement.

This content is cross-posted on GreenBiz.com

17 comments

  • juanette | 5 years ago

    "DVD packaging is an example of a simple change that adds up because of Walmart’s scale."

    The unintended consequences of many of WalMart's cost cutting actions is a decline in the product quality. I work for a small video production company and we and our suppliers are finding it difficult to get a good, consistent product for DVD cases — even in the "premium" product category. Refusing to shop at WalMart because of all their societal ills can still result in having to deal with their negative impacts on the quality of product on the market.

  • Susan Markowitz | 5 years ago

    This is an update to my comment of a day or so ago, expressing my dismay that EDF would go to the extent of actually partnering with a company like Walmart instead of simply giving them a pat on the back and encouragement to continue such efforts.

    The following is part of an email from another highly respected environmental group, the Center for Biological Diversity, to whom I also belong and support. In this case, the only reason Walmart did anything pro-environment was solely due to the CBD's lawsuit:

    "Suit Forces Walmart to Slash Greenhouse Gas Pollution

    Settling lawsuits filed by the Center for Biological Diversity, late last week Walmart agreed to adopt significant anti-global-warming measures in constructing two new Supercenters in Southern California. The settlement requires the nation's largest retailer to install three 250-kilowatt rooftop solar facilities and incorporate cutting-edge efficiency measures at planned stores in Perris and Yucca Valley, as well as to start a refrigerant audit and improvement program to reduce emissions at certain existing California Walmart stores. Walmart will also contribute $120,000 to the Mojave Desert Land Trust for land-conservation purposes. The big-box chain agreed to employ similar CO2-reduction measures for a proposed Supercenter in Riverside.

    The settlement adds to the Center's list of successes in upholding California's premier environmental and land-use law, the California Environmental Quality Act, to improve new development, reduce greenhouse gas pollution, save energy, save money, and promote a vibrant green economy. In the words of Center Senior Attorney Matt Vespa, "If big-box stores are to be built in California, measures like the installation of solar-power systems must be adopted to minimize the projects' greenhouse gas pollution."

    And here, directly, is the LA Times article itself:

    "Los Angeles Times, March 8, 2010

    Wal-Mart settles two environmental lawsuits over planned Perris and Yucca Valley stores
    By Tiffany Hsu

    Wal-Mart Stores Inc. settled two lawsuits over the environmental impact of two proposed stores in California, the Center for Biological Diversity announced Monday.

    Environmentalists had claimed that the Supercenters did not meet greenhouse-gas emission requirements set by the California Environmental Quality Act.

    The mega-retailer agreed to install three rooftop solar projects with at least 250 kilowatts of capacity each, according to letters sent to officials in Perris and Yucca Valley, where Wal-Mart plans to develop Supercenters.

    The stores also will be designed with more stringent efficiency measures, according to the letters, which were signed by representatives from Wal-Mart and others on Thursday. The plans will include LED lighting, recycling programs and centralized energy management systems that monitor and control energy use, analyze refrigeration temperatures and more.

    “Some of these measures may not be appropriate at every location, but the information gained from the Perris store may lead to broader application,” according to one letter, which also was signed by the Center for Biological Diversity and the Coalition for Honest Environmental Evaluation in Perris.

    The Yucca Valley settlement also included a $120,000 contribution to the Mojave Desert Land Trust for land conservation purposes. And although the Center for Biological Diversity and the Coalition for Environmental Integrity in Yucca Valley both agreed not to object to or disrupt the opening of the Wal-Mart location, the coalition still can endorse an initiative that would block or limit development of the super store."

    Clearly, this does NOT jibe with what EDF is being told, and is telling its members, about Walmart's good intentions. I urge EDF members to read the LA Times article and to visit CBD's website — and sign on as a supporter if you are not one already. Again, I offer my strongest objections to EDF's new "unholy alliance" with Walmart. EDF, you are being fed a line…

  • cart | 4 years ago

    When will the Walmart greenhouse gas eliminating project be carried out in China?As a Chinese supplier,we concern about that whether the project will impact our company or product, and shall we have to participate the CDP?Which organization will provide guidance for us?Walmart provides guidance?

  • Regarding packaging, I think cutting back on the amount of packaging is a good idea. But with that said, I think we need to be careful about using alternative materials for packaging. Some "Eco" packaging, like the type used for Sunchips bags, are made from Corn. While it's wonderful that we can make packaging out of corn, that drives up the cost of corn. Corn, used in feed for livestock, is now more expensive so the cost of our meat is more expensive. So I agree it's great we look at alternatives to packaging, but we need to be smart about it.

  • Wonderful thought. I like it. Thank you for posting

  • BJJ | 4 years ago

    Ok, so I'm going to play devils advocate a bit here…

    I don't think anyone can disagree with taking the low hanging fruit like DVD packaging improvements to reduce carbon emissions. And of course WalMart can move mountains with their buying power. However, has anyone stopped to consider the economic impact of forcing suppliers – many who live on only the smallest of margins that WalMart allows – to dramatically change their processes?

    I'd offer that will either force those companies to close or all companies to raise prices. And when that happens you and I will be paying for it at the cash register. So effectively we are decreasing the overall buying power of my paycheck, thus decreasing my quality of life.

    Thoughts?

  • I can understand that Walmart wants to find ways to make a difference but I think some of their approach is not as feasible as they may want you to believe. If suppliers are forced by Walmart to change the way they package then they will have to spend more money to do that. In turn we will end up paying more for items we purchase from there.

  • WalMart's carbon program is going to lead many CPG companies in starting similar programs for their supplier and likely to have a domino effect in the supply chain. So the net impact may be 100 fold of the original scope.

  • For those people arguing that some of their approach isn't feasible, the expanse of Walmart's customer base means that whilst costs will obviosuly be incurred by making teh changes, it will add next to nothing to the price at the end.

    Obviously the cost gets passed on to the consumer, but quality of life will not decrease through 1 or 2 cents across a few products.

    Furthermore, any packaging company operating on small margins should have been planning for eco-friendly changes to their processes for years now (at least since Al Gore brought the issues further into the mainstream), and ultimately if they are unable to complete then it will be their own fault. Theres a global responsibility for consumers to improve the environment, but for those at the heart of the problem such as packaging companies and Walmart themselves as such a massive user of such products, they have more of a duty than anyone.

  • 300,000 TONS by 2015? thats fantastic news. Go walmart!

    D

  • jess spencer | 4 years ago

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