How Walmart is Successfully Driving Scope 3 Decarbonisation
For retail, the biggest challenge on the journey to decarbonisation is also the most crucial.
Accounting for around 25% of global emissions, much of the retail industry’s emissions occur in the retail value chain.
In fact, these so-called Scope 3 emissions make up to 98% of its total emissions.
And so, to make impactful reductions, they must decarbonise their value chains.
For Walmart Inc., the world’s biggest retailer, tackling Scope 3 is no easy task – and why the retailer’s latest milestone is significant.
Announced during an earnings call, CEO Doug McMillon said Walmart’s suppliers have avoided, reduced or sequestered 1 billion metric tonnes of greenhouse gas emissions from their value chains – more than the annual emissions for Germany.
What’s more, this goal has been achieved six years ahead of schedule – putting the retail giant on track to reach net zero by 2040.
This achievement comes as Walmart’s shares hit record high following stronger-than-expected first quarter financial results.
Sales rose rose 5.7% to US$173.38 billion – with sales rising 4% over the last 12 months and global ecommerce sales surging 23%.
Walmart’s Project Gigatron Supply Chain Success
Launched in 2017, Walmart’s pioneering Project Gigaton was among the first corporate programmes focused entirely on addressing Scope 3 emissions.
Designed to encourage suppliers to reduce their carbon footprint, the bold ambition was to reduce, avoid or sequester 1 gigaton – 1 billion metric tonnes – of greenhouse gas emissions in product value chains by 2030.
Walmart’s many merchants and suppliers got to work,” with efforts made in energy efficiency, packaging redesign, food waste reduction and trucking load optimisation.
Hitting the halfway mark in 2022, with a reduction of 574 million metric tonnes and 4,500 suppliers on board, Walmart has now reached its 1 billion metric tonne mark six years early and is engaging more than 5,900 suppliers globally.
“We’ll continue to work with our suppliers on real initiatives with real-world impacts that make our products better and our business stronger,” McMillon said.
“We looked to scientists and product value chain experts, including WWF, EDF, WRI and CDP, for advice on how to estimate emissions, set a pace for reductions, identify ways to lower emissions and provide resources to build supplier capability in emissions reduction and measurement,” says McLoughlin.
Walmart was the first retailer to set a target for emissions reduction approved by Science-Based Targets initiative.
“From the beginning, we asked our suppliers to set concrete goals for emissions reduction based on science-based practical projects focused on the most relevant sources of emissions in their product value chains, such as energy use or agricultural practices.”
Walmart also designed the programme to accommodate suppliers who vary in their readiness and capability of undertaking intensive GHG reduction efforts, providing tools to help suppliers achieve their commitments.
Among these, the Gigaton PPA Program, a project run by Schneider Electric which helps suppliers including Levi Strauss & Co. and Amy’s Kitchen to procure renewable energy.
On the back of such success, Walmart is planning to improve and expand the project, McLaughlin says.
“At Walmart we like to spend a minute celebrating success and then get on with doing something even better. So, we are working to improve and expand Project Gigaton for the benefit of our customers, suppliers and the planet while staying the course toward our goal of zero operational emissions — Scopes 1 and 2 — by 2040.”
“We are assessing which elements of our Scope 3 footprint are addressable and which elements are largely outside our control, which reductions can be achieved through low-cost interventions and which ones are expensive or not feasible through today’s technology,” she said.
Who is Kathleen McLaughlin, Walmart Chief Sustainability Officer?
As well as driving Project Gigatron, McLaughlin is responsible for other programmes that help Walmart advance the sustainability of supply chains – along with those that help create opportunity through jobs and sourcing, foster DEI and build inclusive and resilient communities.
Joining Walmart in 2013, following two decades with global consulting firm McKinsey, McLaughlin is also President of the Walmart Foundation – and in 2018 was recognised as one of the World’s Greatest Leaders by Fortune, for her work in transforming the world and inspiring others to do the same.
Under her leadership, Walmart and Sam’s Club have donated more more than 7.5 billion pounds of food from stores, clubs and distribution centers to Feeding America food banks. Since fiscal year 2019, Walmart, Sam’s Club and the Walmart Foundation have provided more than $105 million for disaster preparedness and response efforts supporting communities around the globe.
In 2022, the company and Foundation awarded more than $1.7 billion in cash and in-kind donations.
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