Walmart’s Project Gigaton win shows how to cut emissions with speed and scale
During an earnings call with investors on Tuesday, February 20, 2024, Walmart CEO Doug McMillon announced the company has achieved its moonshot Project Gigaton goal to reduce, avoid, or sequester 1 gigaton of emissions from its supply chain six years earlier than expected. That is the equivalent to what Japan emits in a year.
When Walmart launched Project Gigaton in 2017, inviting its 100,000 suppliers worldwide to join them in a sustainability journey, supplier engagement on sustainability had never been done at this scale. But when the world’s largest retailer asks, companies listen.
The power of asking for action from your supply chain
Environmental Defense Fund partnered with Walmart to help set the Project Gigaton goal, review the science, evaluate emissions reductions pathways and look at the data reported by the suppliers, working alongside World Wildlife Fund (WWF). Since that time, Walmart has focused on testing, iteration, and speed to enlist suppliers to tackle emissions “hot spots.” Supply chains typically account for 90% of a company’s footprint – given their complexity, they are often the biggest hurdle for corporate climate action.
Walmart created a platform to connect, educate and collaborate with suppliers on sustainability, a strategy that has catalyzed action across the industries. This engagement was groundbreaking, as many companies in their supply chain had never previously considered their emissions profiles.
The approaches spanned the early win-wins of scaling energy efficiency, which saved money immediately – to innovations and partnerships with Schneider Electric and HSBC which collaboratively pool resources and financing to enable BIG projects that create value over time.
EDF and other analysts identified emissions hotspots in Walmart’s supply chain, focusing efforts where Walmart had significant business influence. One such area was the greenhouse gas emissions associated with Walmart’s billions of dollars in food sales. In particular, EDF and Walmart collaborated to set the first supply chain climate goal of any retailer (the precursor to Project Gigaton) and to engage suppliers to meet and exceed that goal. This work included engaging over a dozen major food companies representing 30% of food and beverage business in the U.S. to optimize fertilizer use on millions of acres of U.S. farms, saving farmers money while reducing climate impacts. The projects have grown and expanded to include ever deeper supplier engagement on climate-smart agriculture.
The business case for climate action in value chains
Effective and efficient supply chains rely on a stable climate. Unpredictable weather events add instability and increase costs. Understanding supply chains is essential not just to address climate risks, but also resiliency. Failure to act poses significant economic risks, with potential losses across the global economy estimated at $178 trillion by 2070. However, immediate action presents a business opportunity to boost the economy by $43 trillion over the same period.
Walmart’s earnings call announcement underscores what we all know: climate action is smart business. To achieve both better livelihoods for people and the planet, it’s imperative that we decouple economic growth from emissions. While “green products” help to shift markets and meet consumer demand– sustainability, efficiency and resiliency need to reach overall supply chains, too.
Today, the thousands of Project Gigaton “Giga Gurus” who are meeting the top requirements for Project Gigaton are better prepared for an evolving regulatory landscape that will require climate disclosures in dozens of major economies around the world. Project Gigaton is a strong demand signal for action from global supply chains, and should be a working model for climate action.
Growing urgency
No individual country or company can tackle the climate crisis alone. Scientific evidence indicates that we have less than a decade to halve emissions and we must achieve net zero globally by around mid-century to avoid the most catastrophic and irreversible damages from climate change.
While momentum in the private sector is clearly building, we have a long way to go. Today nearly 1,000 of the largest global companies have set net zero goals, yet the vast majority don’t yet have specific plans on how to meet them. To help companies meet the moment, EDF has launched the Net Zero Action Accelerator with 25 action pathways across six industries. Walmart’s ability to send a clear demand signal for action and to stimulate a flywheel of action among suppliers is inspiring news for traction and speed.
What happens next?
Best practice must become standard practice. As other retailers and companies innovate, we need to share learnings and scale what works. The focus must now shift to increasing action to cut emissions by 50% by 2030.
While Project Gigaton could be improved, since it uses suppliers’ self-reported data, accounts for both achieved, projected and avoided emissions, through 2030, and takes credit for all of a supplier’s emissions reductions that they report to Walmart, it is notable for clearly and strongly encouraging companies to begin their climate decarbonization journey.
By leveraging its scale, Walmart has demonstrated how a single company can drive change throughout its supply chain. Walmart’s achievements serve as a blueprint for others to follow: partnering with NGOs, setting ambitious goals, transparently measuring and disclosing progress, supporting climate policies, and engaging suppliers to take action. However, Walmart must continue to lead by transparently disclosing its full supply chain (Scope 3) emissions and setting a new science-aligned climate target for those emissions.
By prioritizing sustainability, companies can not only mitigate risks but also seize opportunities for innovation and growth. Project Gigaton shows what is possible when a company commits to work over time and delivers results. Action matters now more than ever.
