Walmart is the world’s largest retailer and the world’s largest private employer with 2.2 million employees worldwide. It has a vast supply chain that spans the globe, and it relies heavily on materials which if poorly managed damage the world. As such, taking a sustainable approach to business is not an easy thing for the retailer to do.
That said, they can point to some good successes in making Walmart a sustainable entity, and this month the company took a huge step forward when it announced that by 2025 it would cut its reliance on non renewable energy across its empire by 50%. This is historic for Walmart, as for the first time it has announced a target that is in line with climate based science.
Prior to this, they were working towards goals that were aspirational in nature. I.e. Zero waste and 100% renewable energy. Their sustainability goals were not in line with science based targets. In comparison to other giants such as Apple and Ikea, they were lagging behind.
Walmart’s Sustainable Successes
That said, Walmart’s drive for efficiency is very impressive. It has applied the same scrutiny to sustainability in its supply chain as it does when controlling costs. As such, Walmart can say and claim as a success that it has managed to reduce the use of fertilizer, packaging, and vehicle use throughout its supply chain.
Through asking its supply chain to work with farmers, the reduction in fertiliser user combined with other emissions, has seen a 28 million ton reduction in emissions, exceeding its 20 million ton 2015 target. Its use of vehicles is also impressive, rerouting and improving loading efficiency to reduce the miles travelled. The retailer is also working with trailer and tractor manufacturers to improve design.
To offset criticism of the chain’s urban sprawl it is working with the National Fish and Wildlife Foundation to preserve 1 acre of natural habitat for every 1 acre it develops. This is a good initiative and few can argue with its merits.
Where Walmart was wanting
In many ways what Walmart was failing to do was highlighted by Ikea’s Steve Howard, chief environmental sustainability officer. Speaking at a climate change conference in London, he stated that companies who announced a target to reduce emissions by 50% confuses people. It is like saying we’re going to be half as bad as last year. Howard stated you have to be clear in your targets and go for it 100%.
This is where Walmart’s sustainability policy was getting called into question. By failing to match their initiatives to reduce emissions that are in line with science-based targets, it was difficult to gauge if they are doing a good job or not. Twenty eight million ton reduction in emissions sounds wonderful and probably is, but what does this mean in relation to climate change? How big a difference is this actually making?
This was further highlighted by its renewable energy policies. Only 25% of its energy needs come from renewable sources. Given how vast and globe spanning the company is, its consumption of fossil fuel consumption is vast.
Walmart Conquers its Achilles Heel
Perhaps Walmart’s failing was that it applied an efficiency model to renewable energy. In California, Texas, New Jersey, Arizona, and Hawaii, the company buys more renewable energy as these states give businesses incentives to do so. As such, most of Walmart’s US based renewable energy was in these states. This was arguably undermining renewable energy expansion.
Now, with the announcement of science-based targets, the company has finally taken a significant step to zero waste. Although it is no Apple or Ikea, it is moving in the right direction.