Walmart Will Force Suppliers to Cut Carbon Use

Last Updated Feb 26, 2010 2:52 PM EST

OK, we'll cut our greenhouse gas emissions. But by "cutting our emissions", what we really mean is that we'll force everyone else to cut their emissions. Hey, whatever works, right?

That's what Walmart might as well be saying in its latest sustainability goal report, in which the retailer promises to cut out 20 million tons of greenhouse gas emissions from its business by the end of 2015. Instead of undergoing an epic renovation of its stores, though, Walmart is looking to another source: its suppliers.

And that includes just about everyone. I could name examples, like Kimberly-Clark and Procter & Gamble, but the full list would go on into many thousands of names, including companies both large and small. According to Walmart, forcing its supply chain to revamp will avert as much GHG emissions as would taking 3.8 million cars off the road for a year.

Here are Walmart's three steps to cutting supplier emissions; note that I've trimmed some of the text for length reasons (the original is here):

  • Selection -- Walmart 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 Walmart product categories... 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. Walmart must ... show how that reduction would not have occurred without Walmart's participation.
  • Assessment -- Suppliers and Walmart will jointly account for the reductions. ClearCarbon will perform a quality assurance review of those claims to ensure methodology, completeness and calculations are correct...
As you can see, Walmart actually has some skin in the game -- but just a little bit. The company chooses its targets and makes sure that action is taken; otherwise, it's still up to the supplier to deliver the product as ordered, without incurring such high costs that Walmart decides to move onto another supplier (a common tactic at the company).

Making promises for its supply chain isn't a totally new strategy for Walmart. In the name of efficiency, the retailer also demanded in 2003 that its biggest suppliers start using RFID tracking technology.

The transition to RFID wasn't entirely smooth, but it did give the entire RFID industry a boost; a similar effect might occur for the carbon tracking and mitigation industry in this case. As it is, there's already a hefty body of evidence that the supply chain is the best place to cut emissions. Nike, for example, revamped its chain to lower emissions years ago.

That's the positive side to Walmart's move. The negative, at least for those worried about total emissions, is that Walmart's strategy, bears more than a little resemblance to China, which I just wrote about earlier this morning.

You see, China is worried about climate change, or at least says that it is. But it's also a commercial and industrial juggernaut containing a whole lot of underpaid, underemployed workers (starting to see the resemblance?).

In China, there's a booming cleantech industry incorporating wind turbines, solar panels and a lot of efficiency measures. Ditto for Walmart, which even has the newest cleantech fad, Bloom Boxes. Yet all of this activity is only in the name of reducing carbon "intensity", or the emissions produced per unit of output.

Total emissions, for the company or the country, are set to rise, so they're both demanding that the real cuts must come from elsewhere.

My analogy peters out at a certain point, though, because Walmart, as we all know, sources just about everything from China. Perhaps in the end, it really will be China making the cuts.

So does Walmart deserve kudos for working an emissions plan into its growth strategy? That depends on your outlook, but the answer of many onlookers through the Walmart's life has been "no". The company as a whole is still a big box retailer run rampant, no matter what smaller initiatives it passes.

But there is some evidence of a change deeper in Walmart culture. Take a look at one of the Atlantic's features this month, in which Walmart's local, organic foods compare favorably -- and perhaps even beat -- similar offerings from Whole Foods. At some point, we might have to consider the idea that Walmart really is becoming a better corporate citizen.