Wal-Mart has announced its plans to eliminate 20 million metric tons of greenhouse gas (GHG) emissions from its global supply chain by the end of 2015. This represents one-and-a-half times the company’s estimated global carbon footprint growth over the next five years and is the equivalent of taking more than 3.8 million cars off the road for a year.
“Energy efficiency and carbon reduction are central issues in the world today,” said Mike Duke, Wal-Mart president and CEO.
Duke further added, “We have 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.”
The footprint of Wal-Mart’s global supply chain is many times larger than its operational footprint and represents a more impactful opportunity to reduce emissions. “Like everything we do at Wal-Mart, 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 will be helping our customers do the same thing.”
Wal-Mart collaborated with Environmental Defense Fund (EDF) to develop this approach that looks at the supply chain on a global scale. Other external advisers include PricewaterhouseCoopers, ClearCarbon Inc, the Carbon Disclosure Project and the Applied Sustainability Center (ASC) at the University of Arkansas. This team 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, president of Environmental Defense Fund. “Wal-Mart’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 innovative program to reduce GHGs has three main components:
• Selection — Wal-Mart 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 Wal-Mart 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. Wal-Mart must demonstrate it had direct influence on the reduction and show how that reduction would not have occurred without Wal-Mart’s participation.
• Assessment — Suppliers and Wal-Mart 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.
— IndiaRetailing Bureau