Environmental Defense Fund partners with companies like Walmart to create environmental and business benefits at scale.
This includes sharing best practices that can be replicated across industries. Ten years of working with Walmart and 25 years of partnering with leading brands have helped EDF develop a simple but powerful framework for advancing sustainability through the supply chain. This framework is defined by three key elements of corporate sustainability leadership: science, strategy and systems.
SCIENCE – Make it count. All worthwhile sustainability initiatives are built on a solid foundation of science that puts corporate sustainability goals in context of the overall challenge at hand. Only when we know what is needed to achieve sustainability on a global scale can we interpret the level of responsibility that companies should bear.
EDF helped Walmart arrive at the target of reducing supply chain emissions by 20 million metric tons by discovering that 90 percent of the company’s greenhouse gas (GHG) footprint exists in its supply chain. From there we dug in further and identified the key GHG ‘hot spots’ in the supply chain. Only then could we begin addressing those challenges.
Companies must assess where the current sustainability hot spots exist in its operations and in its supply chain before creating a plan to address the highest impact areas. Applying science also means grounding your sustainability goals in solid economics. Corporate sustainability leadership must focus on the long-term effects of climate change and other environmental risks in the supply chain and realize that long-term risk mitigation is smart business.
When setting goals and implementing sustainability programs, companies should first understand the big picture of what environmental outcomes must be achieved, by when, and what role they should play in making those outcomes happen.
STRATEGY – Make it core. Leading companies embed sustainability in the core of their business. They create goals and initiatives that extend naturally from their comparative advantage and add real value to their supply chain while reducing environmental impacts.
Using Walmart as an example, they focused on what they do best: sourcing and selling consumer products. By comparing the biggest sources of emissions with sales data, Walmart identified the best areas of opportunity. Two examples of Walmart’s strategy include selling substantially more energy efficient lightbulbs that reduce consumer energy use and sending the demand signal to source more sustainable corn-based products through optimized fertilizer use.
Tips for companies:
- Be ambitious: Set aggressive, yet achievable, science-based sustainability goals that match the scale of the problem and the scale of your influence while aligning with central business strategy. Publicly committing to big goals sends a strong signal to suppliers and customers that sustainability is core to your business.
- Measure to manage: Like any key business initiative, set and report on clear performance metrics. Metrics should focus on real, measurable, absolute improvement and a long-term view. Make sure that sustainability teams and core business units are aligned on the key metrics that will allow both the business and the planet to thrive.
- Persevere: Knowing that the work matters to the business and the planet, commit to seeing the goal through and adjusting course as necessary. Most likely your supply chain isn’t static, with suppliers, products and challenges shifting with the ebbs and flows of the business. You need to create tools to easily onboard new stakeholders, and continually reassess where suppliers or products could create new opportunities for sustainability innovation.
SYSTEMS – Make it scale. Leading companies recognize that today’s environmental challenges are too big to tackle on their own. Taking a systems-approach means looking beyond the four walls of your company, collaborating with key supply chain partners and policy makers, and sending a clear demand signal for sustainable products and practices across your supply chain.
EDF and Walmart were able to achieve ambitious GHG reduction goals by collaborating with buyers, suppliers and producers across the supply chain. The Sustainability Consortium was created to allow all retailers and consumer product companies to measure environmental impacts in their supply chains. Even competitors were brought to the table to scale best practices across the industry.
Tips for companies:
- Signal demand: Brands and retailers have the leverage to send game-changing demand signals for greater sustainability throughout your supply chains. Create and communicate clear sustainability standards for the supply side of your business.
- Engage key stakeholders: Collaborate across internal departments, industries, competitors, NGOs and policymakers to deliver impact at scale. Identify key collaborators for each goal and commit to consistent engagement. For retailers, this means involving your executives, your employees, suppliers, buyers and distributors by clearly communicating your sustainability goals and getting stakeholder buy-in. It also means providing transparency to your customers about the environmental impact of the products and services they buy, allowing them to make better choices for the planet.
- Align on policy: The size and the scale of the environmental challenges we face require both corporate leadership and regulatory change. Companies need to weigh in on local, state and national policies to ensure their corporate sustainability efforts align with their public policy stances. By supporting smart climate and environmental policy, companies can actively address future business risks and supply chain disruptions from climate change.