I am just back from a week in Beijing, where Environmental Defense Fund was part of Walmart’s announcement of a new goal to reduce greenhouse gas emissions in its China supply chain. Had I not been there in person, I’m not sure I could have accurately comprehended how essential that this goal – a 50 million metric ton (MMT) reduction by 2030 – must be followed by swift implementation.
That’s because every day in Beijing felt like the worst day in San Francisco, my home, when last year’s horrific wildfires made our eyes and lungs burn. “Normal” in Beijing means not being able to see down to the end of the block, and sharing the crowded streets with commuters, parents and children all covered by facemasks.
Unable to trust what I was actually experiencing, I downloaded an app that mapped the world’s worst air quality. All but three of the top 11 cities listed were in China.
I needn’t have been surprised: China is the world’s largest source of carbon emissions, and the air quality of many of its major cities fails to meet international health standards. Outdoor air pollution contributes to the deaths of an estimated 1.6 million people in China every year.
Which really brings home the significance of Walmart China’s goal: achieving it will eliminate the equivalent of emissions associated with the average annual electricity consumption of 40 million Chinese households.
Walmart China’s journey to get to where it is today – a true sustainability leader – has not been an easy one. Finding a way to scale its efforts so that it can benefit suppliers while producing the largest return for our environment has proved to be difficult, but not impossible. It took determination and the ability to persevere and work with unlikely allies.
When Walmart set an ambitious goal in 2008 to make its top 200 Chinese factories 20 percent more energy-efficient by 2012, EDF helped launch a factory efficiency program and visited hundreds of Walmart’s factories, advising each of them on how to become more efficient.
This journey in China echoes what we've seen throughout our 25+ years of working with companies – that setting big goals drives innovation and business value. The hard work and tenacity is worth the effort, both for our planet and for business. Companies like Walmart who incorporate sustainability into their business DNA see the rewards in lower costs, better products and improved customer engagement. They meet and exceed their goals and this gives them confidence to do more.
Which is what we're seeing Walmart do today. This new China goal also fits into the company’s larger Project Gigaton, which aims to work with its suppliers to reduce emissions in its global value chain by one billion metric tons – a gigaton – by 2030. That’s equivalent to eliminating the emissions from more than 211 million average passenger vehicles in a year – a reduction that Beijing (and every city in the world) could really use.
So the momentum is building…but there is much work to be done. My short visit to China showed me that:
1.) Other retailers need to join Walmart. Taking responsibility for environmental progress in global supply chains should be a basic expectation for companies at the top of the supply chain – even those like Amazon who operate on an e-commerce marketplace.
2.) Suppliers need to step up the speed and scale of their sustainability plans. The good news? Help is available. McKinsey created RedE, for example, a tool that analyzes the efficiency of each process and piece of equipment in a company’s supply chain network. It then uses that data to show facility managers how they measure up to peers and which initiatives will deliver the most benefit. Companies that use RedE can see an average cost reduction of 10-20 percent on their resource spend across all facilities. The savings are there, the demand for change is there, and the tools and help exists – no excuses not to act.
3.) Companies cannot do it alone. China has a government that is actively pursuing a holistic and aggressive strategy on the environment. Last December, China adopted a national trading system for greenhouse gas emissions, building off of years of work setting up regional trading systems in the provinces. For all the criticisms that can be lobbed at the Chinese government, it is an active partner in addressing climate change.
4.) Citizens should speak up. I don’t care if you’re a senator, a CEO or a consumer; no one wants Beijing-quality air in their community. No one wants to have to wear facemasks simply to breathe. No one wants to keep their children indoors because they can’t play outside. Individuals and business leaders need to speak up right now, here in the U.S. and abroad, to protect our planet.
The consumer good global supply chain accounts for 60 percent of all greenhouse gas emissions, 80 percent of water usage, and two-thirds of tropical forest loss globally. We all need to help create a world where the products we use every single day are sustainable.
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