Climate Change

SASB: CG-MR-130a.1, CG-EC-410a.2; FB-FR-110b.1
GRI: 103-1; 103-2; 103-3; 201-2; 302-1; 302-4; 305-1; 305-2; 305-3; 305-4; 305-5
TCFD: See table
UN SDGs: 7; 13
E | Published April 6, 2022 | Last Updated August 29, 2022

Walmart has committed to science-based targets for emissions reduction, including achieving zero emissions in our operations by 2040 and engaging suppliers through our Project Gigaton^TM initiative to reduce or avoid supply chain emissions by 1 billion metric tons by 2030. We aim to galvanize collective action across the retail and consumer goods sector through our advocacy, supplier engagement, philanthropy and innovation in product supply chain practices, while taking steps to strengthen the resilience of our business against the effects of climate change.

Climate change is one of the greatest challenges of our time, profoundly affecting all regions of the world and all sectors of society. Without mitigation or adaptation, climate effects such as warming, flooding, drought, extreme weather events and rising sea levels are projected to reduce agricultural yields, force people from their homes, endanger livelihoods and destroy infrastructure in the coming decades.

To avoid the worst effects of climate change, the Intergovernmental Panel on Climate Change (IPCC) has called for the world to reduce global greenhouse gas (GHG) emissions to net zero by 2050. Achieving this moonshot goal requires immediate action from all parts of society, including business. Companies need to be part of the solution to manage physical and transition risk, maintain societal license to operate and create value for business and society through mitigation and adaptation initiatives that draw on unique business capabilities.

As a large omni-channel retailer with millions of customers worldwide and a global sourcing footprint, Walmart is able to lead by reducing emissions in our operations and supply chain while galvanizing collective action across our industry. We believe a strong climate action strategy will help us manage the physical and transition risks associated with climate change, strengthening the resilience of our business and helping us create value for stakeholders.

We seek to lead on climate action. We focus on achieving our science-based targets for emissions reduction in our global operations and supply chain in ways that strengthen the performance and resilience of our business. We also advocate for and support initiatives to accelerate progress toward net zero by 2050 across the industry, and society more broadly, by drawing on our capabilities as an international retailer — our ability to engage suppliers across many categories, our retail and supply chain expertise, our digital capabilities, our leadership role in industry and multi-stakeholder coalitions and forums and strategic philanthropy through Walmart.org. Our efforts include:

• Governing our climate strategy through accountable leadership and assessing climate risk;
• Mitigating emissions through approved science-based targets, covering both our global operations (aiming for zero emissions by 2040) and suppliers (through Project Gigaton^TM);
• Adapting our business (e.g., facilities and sourcing) to be more resilient in the face of climate risk;
• Advocating for 1.5º-C-aligned public policy through direct advocacy, engagement with trade associations and consortia, and corporate communication; and
• Reporting on our progress with transparency, verifiable data, and science-based methodologies, and encouraging our suppliers to set ambitious targets and report on their progress with equivalent diligence.
  

Governance | Climate Risk Assessment | Mitigation | Adaptation | Advocacy | Reporting

Management Oversight

Climate strategy is a key part of Walmart’s Environmental, Social and Governance (ESG) strategy. Walmart’s corporate sustainability team leads the development of the company’s climate strategy, working with a cross-functional team including finance, real estate, operations, merchandising, strategy, and public policy. Our climate strategy is reviewed at least annually by the Walmart executive leadership team.

The company assesses climate risk annually as part of our Enterprise Risk Management process. Periodically, we conduct an in-depth, scenario-based climate risk assessment (first completed in 2017; updated in 2020). Merchants and operators have goals that support our climate mitigation and adaptation strategies, including emissions reduction initiatives.

Board Oversight

The Nominating and Governance Committee (NGC) of the Board of Directors oversees Walmart's climate strategy. In 2021, the NGC and management discussed Walmart's climate risk assessment; integration of climate mitigation and adaptation into the company's long-range plans, annual operating plans and Enterprise Risk Management; Walmart's climate policy positions, advocacy strategy and external engagement; and climate disclosure strategies. Highlights of the committee’s discussions with management are shared with the full Board of Directors.

To inform the company’s climate mitigation and adaptation strategies, Walmart periodically conducts a scenario-based climate risk assessment, aiming to align with the scenario guidance set forth by the Task Force on Climate-related Financial Disclosure (TCFD). We updated the physical risk analysis in 2020 with the help of a third-party consultant, considering climate-related risks in the short-, medium- and long-term.

Methodology & Findings

To assess physical risk, we used Representative Concentration Pathway (RCP) 8.5, a GHG concentration scenario adopted by the United Nations Intergovernmental Panel on Climate Change that assumes the absence of further decarbonization on the planet (and is therefore an indicator of the inherent/unmitigated risk of climate change). We analyzed the impact of five associated climate effects — flood (riverine and coastal), heat, drought, extreme precipitation, and extreme winds — across five key geographies (Canada, China, India, Mexico, and the United States) for 2030 and 2050. We evaluated direct impacts of climate change on Walmart’s physical assets (retail stores and retail-related facilities), supply chain, and communities.

Such climate risks and potential impacts are not unique to Walmart; they will affect food and general merchandise retailers as well as other businesses and communities around the world. While the limitations of the analysis¹⁰ mean it cannot be used to predict the net impact on Walmart’s financial results of operations or business operations, and the improbable nature of the RCP 8.5 scenario mean it cannot be used to determine the materiality of climate-related risks and opportunities to the business, it nevertheless provides helpful insights into the relative impact of various climate effects and the relevance of Walmart’s mitigation and adaptation strategies. And while no single climate risk appears to be consequential for Walmart due to the long-term nature of the risks and Walmart’s relatively large scale, taken together, they paint a sobering picture of potential impact to people and the planet and underscore the need for immediate business action to help prevent the worst effects of climate change.

Insights provided by the climate risk assessment help us set long-term strategy and drive innovation. Leaders from across the company, including merchandising, real estate, operations, and supply chain, discussed the results of the physical risk assessment and incorporated findings into their operating plans.

Retail Stores & Retail-Related Facilities

The climate risk assessment identified potential variables that could affect Walmart’s facilities over the next three decades: flooding and extreme storms, with potential damage to buildings and inventory; and temperature changes, which the modeling suggests could increase heating and cooling costs in two-thirds of Walmart locations by 2030 and 80% of locations by 2050 — underscoring the relevance of Walmart clean energy initiatives and other mitigation and adaptation efforts.

Changes to historical location heating and cooling costs¹⁰—predicted for 2050

Supply Chain

By 2050, climate change is likely to affect the production, distribution and (in some cases) the viability of food and other consumer products that depend on agriculture. We analyzed the potential climate exposure of 25 commodities. For the 11 goods that face the highest overall impact from climate change, we assessed three factors: land suitability, farming conditions for animal products and heat stress for people. The analysis suggested that some commodities (e.g., coffee, cocoa and cotton) may face significant challenges due to future climate effects, while others (e.g., avocados, animal feed, milk, oranges and rice) may remain largely unaffected. Our merchants and global sourcing teams are working with suppliers to implement more sustainable practices that promote resilience, such as cultivating heat resistant crops to prevent future sourcing challenges. The analysis underscores the relevance of Walmart sustainable commodity initiatives and other initiatives focused on enhancing the resilience of supply chains.

Communities

We modeled the potential impact of several climate variables on Walmart U.S. store communities: flooding (from either coastal or riverine sources), extreme wind (e.g., hurricanes) and heat. Our analysis suggests that ~50% of communities currently served by Walmart U.S. facilities may face significant, long-term disruption by 2050. If these areas become less habitable, people could be forced to relocate — creating challenges to physical, financial, and emotional well-being for our customers and associates, and potentially requiring shifts to our store and eCommerce footprint. The financial well-being of a community may deteriorate due to the loss of jobs and homes after a hurricane, and in some vulnerable U.S. counties, there could be an up to 230% increase in household power costs.

A New York Times analysis found that summer temperatures in cities such as Dallas, Miami and New York can be warmer in poorer neighborhoods than in wealthier ones, where populations are generally whiter. Our own analysis also suggests that climate change has the potential to disproportionately impact vulnerable populations, including communities of color. We continue to advocate for climate solutions that advance equity. For example, in Florida, we worked with utility companies, advocates and regulators to help negotiate the largest shared solar program in the country, which authorizes nearly 40 megawatts of clean energy for low-income Floridians.

Walmart’s climate change mitigation strategy centers on achievement of ambitious goals:

• To achieve zero emissions across our global operations (Scopes 1 & 2) by 2040; and
• Our goal to help reduce or avoid one billion metric tons (a gigaton) of greenhouse gases in the global value chain (Scope 3) by 2030.

Emissions From Our Global Operations (Scopes 1 & 2)

In 2020, we raised our aspiration to reduce emissions in our operations (Scopes 1 & 2) by realigning our science-based target to a 1.5-degree Celsius trajectory, the highest ambition approved by the SBTi. Our goal is to achieve zero emissions across Walmart’s global operations by 2040, which includes our SBTi-approved interim goal of reducing absolute Scopes 1 and 2 GHG emissions by 35% by 2025 and by 65% by 2030 from our 2015 base year. We were the first U.S. retailer to make a zero emissions commitment that does not rely on carbon offsets. We achieved a 23.2% reduction in combined Scopes 1 and 2 emissions between our 2015 calendar year baseline and 2021.³

While Scope 2 emissions in 2021 declined by 19% over 2020, 2021 Scope 1 emissions increased by approximately 9%.³ The primary driver of the increase in Scope 1 emissions was increases in onsite refrigerants. Our plans to address these factors are addressed below.

Despite the continued rise in Scope 1 emissions, momentum in Scope 2 reductions has meant that, through CY2021, our combined Scope 1 and 2 emissions reduction has tracked the downward trajectory of our science-based target. This may not be the case each year, as the pace and scope of our investments in emissions reduction and realized reductions are not linear. To continue to move toward our science-based target, we continue to work towards reducing our emissions through five primary workstreams:

• Renewable energy
• Energy efficiency
• Refrigeration
• Transportation
• Stationary fuels

While the relative contribution of each workstream toward emissions reduction will vary over time based on operational, financial, and technological considerations, they all matter for us to achieve our zero-emissions ambition and interim targets.

Walmart’s Annual Emissions
Million metric tons (MMT) CO₂e ²

Renewable Energy

Electricity is the biggest contributor to our operational emissions, accounting for nearly 100% of our Scope 2 emissions and approximately 47% of our overall operational emissions in 2021. To achieve our overall goal of zero emissions across global operations by 2040, we aspire to power 50% of our global operations with renewable sources of energy by 2025 and 100% by 2035. In 2021, an estimated 46% of our global electricity needs were supplied by renewable sources.⁵ Walmart directly procured an estimated 28% of our global electricity needs through Renewable Energy contracts in 2021.⁶

We make progress through a combination of onsite generation and power purchase agreements:

• As of the end of 2021, we had more than 600 onsite and offsite renewable energy projects in operation or under development in over 10 countries.⁵  According to the U.S. EPA Green Power Partnership Top 30 Retail Ranking, Walmart was the top retail partner in terms of annual green power usage in the U.S. as of July 2022.  
• In 2021, we contracted to purchase additional renewable energy, including 50 MW of a 129 MW community solar project in New York that will supply renewable energy to 36 facilities.  

We also participate in and support coalitions like the Clean Energy Buyers Association (formerly REBA), RE100, and others to help shape energy policies and advance cost-effective sustainable options in the regions where we operate.

When published, reporting on the allocation and impact of bond proceeds can be found on our Investor Relations site for ESG Investors.

Energy Efficiency

Our energy efficiency strategy includes both new facility design and construction and retrofitting existing facilities:

• We are incorporating efficiency into new store designs in lighting, heating, ventilation and air conditioning (HVAC), refrigeration, and other categories such as plug loads.  
• As our existing buildings and equipment age, we aim to replace or upgrade older equipment with the latest in high-efficiency technology.  
• We use technology to monitor and optimize energy use in our buildings, and have installed energy meters at thousands of our facilities around the world. This allows energy managers to monitor energy consumption in almost real time at our retail stores and distribution centers. This data is used in several ways, including compiling monthly store reports, triggering variance alarms, diagnosing equipment problems and validating performance of new equipment tests. 

Transportation

Our fleet (transport fuel and mobile refrigerants) contributed approximately 21% of our Scope 1 emissions (and approximately 11% of our overall operational emissions) in 2021. Electrifying our fleet and reaching net-zero emissions from all our vehicles and transportation network, including long-haul trucks in the U.S. and Canada, is a key priority for reaching our zero-emissions target.

We use four strategies to accelerate this work:

Enhancing Our Fleet: Between 2005 and 2015, we improved our truck fleet efficiency—almost doubling it in 10 years—in collaboration with equipment manufacturers, policymakers, utilities, transportation working groups and other organizations. While efficiency remains a focus, we are now working within our fleet to evaluate potential solutions to help us substantially reduce our emissions, including testing heavy-duty zero-emission vehicles, battery electric vehicles and hydrogen fuel cell vehicles. We test certain new technologies through conversion to low-carbon fuels and technologies—such as transitioning diesel-operated forklifts to electric ones. These conversions are facilitated by Low Carbon Fuel Standard credit programs, such as those in California and Oregon, which provide a financial benefit for transitioning equipment.

Last Mile: As much as possible, we are seeking to electrify our last-mile offerings to customers. Walmart U.S. announced plans to purchase 1,100 Ford E-Transit electric vans in 2022 and has reserved 5,000 BrightDrop electric delivery vans, which will hit the road as early as 2023. Walmart also announced an agreement with Canoo in 2022 to purchase 4,500 all-electric last-mile delivery vehicles with the option to purchase up to 10,000 units. These vehicles will be part of our growing last-mile delivery fleet. In India, our Flipkart business joined the EV100 initiative and committed to using electric vehicles for delivery by 2030.

Class 8 Heavy-Duty Truck Innovations: Currently, there is no scalable solution to decarbonize long-haul/heavy-duty Class 8 tractors. We believe multiple technologies could play a role in the future, including renewable diesel, electric battery and hydrogen fuels. We support the development of these technologies by participating in feasibility testing and providing feedback to manufacturers to ensure vehicle technology meets the needs of Walmart’s fleet and other large fleets. For example:

• Walmart Canada announced that it has reserved 130 Tesla Semi trucks, electric trucks that are designed to use less than two kilowatt-hours of energy per mile at Gross Vehicle Weight and highway speed.    
• We are currently using seven electric yard trucks with a plan to increase the number of electric yard trucks in operation by the end of 2022. Currently, our electric yard trucks provide approximately 50% emissions reduction compared to diesel trucks.  
• In 2023, Walmart plans to test several electric and hydrogen fuel powered Class 8 vehicles in its operation.  

Public Policy: Walmart supports public policy that will create an enabling environment for the development, adoption and scaling of zero-emission commercial transportation fleets. Collaborating with PepsiCo, Walmart released a set of public policy principles to convey to federal and state policymakers the types of policy interventions, planning and guidance that can support this transition. These principles reflect our business strategy, promote efficiency and optimization as a reduction pathway and take a technology-neutral approach so that we can align our distribution network outcomes with environmental and community benefits.

Read more about how we are working to reduce emissions in our transportation network.

Stationary Fuels

Stationary fuels, including fossil fuels used for heating, cooling and backup power, contributed approximately 20% of our Scope 1 emissions (and approximately 11% of our overall operational emissions) in 2021. A key part of our decarbonization strategy is to reduce our dependence on these fuels by increasing efficiency, transitioning to cleaner fuels, and electrifying equipment. For example, at our U.S. stores we have added electrical connection points to power units (such as our refrigerated trailers), which provide temporary storage capacity during peak seasons.

Onsite Refrigerants

Onsite refrigerant emissions contributed approximately 58% of our Scope 1 emissions (and 31% of our overall operational emissions) in 2021. Global Scope 1 onsite refrigerant emissions increased 17% from 2020 to 2021. Our analysis suggests that the continued increase in our onsite refrigerant emissions remains primarily due to ongoing maintenance of refrigeration equipment using R-404A, a widely used refrigerant introduced in the mid-1990s as a replacement for ozone-depleting refrigerants.¹¹ As our equipment ages and is retired from service, we are replacing it with lower Global Warming Potential (GWP) alternatives. We anticipate a continued rise in onsite refrigerant emissions in the near term until this equipment is converted.

We are addressing these emissions in three ways:

Managing Leaks: We continue working to minimize refrigerant gas leakage through repairing and maintaining our existing equipment, as well as by working with industry-leading consultants to implement innovative solutions for reuse. Such efforts have resulted in an average leak rate across our U.S. store operations that is lower than the supermarket industry average stated by the U.S. Environmental Protection Agency (EPA).

Implementing Low-GWP Systems: We operate more than 100 facilities (stores and distribution centers) using ultra-low GWP refrigerants including carbon dioxide (CO₂), glycol and ammonia. These systems are used in new construction where commercially available. For example, in November 2021, we opened a store in Yaphank, New York that is the first to fully utilize CO₂ technology for the store’s refrigeration needs. Most systems across our U.S. retail footprint, however, currently utilize high-GWP refrigerants. Those systems still need to be converted to low-GWP systems to reach our zero emissions target. Our ongoing strategy is to replace these systems as they reach their end-of-life, balancing the investment and replacement schedule with our zero-emissions commitments.

Advocacy to Support Scaled Adoption of Low-GWP Technology: Walmart supports federal policy that would require the phasing out of high-GWP refrigerants, as that would support market changes necessary to implement low-GWP systems at scale and at reasonable cost. Walmart joined members of the Air-Conditioning, Heating, and Refrigeration Institute in endorsing a petition to the EPA regarding the adoption of rules to prohibit the use of refrigerants with high GWP. Walmart also submitted a letter to the EPA supporting regulatory actions for stationary refrigeration equipment that are environmentally effective (e.g., limiting new commercial systems with charges over 50 lbs. to use refrigerants with a GWP of 150 or less) and nationally consistent.

Supply Chain (Scope 3)

Walmart’s science-based target includes Project Gigaton^TM, an ambitious effort to engage suppliers, NGOs and other stakeholders in climate action with a goal to reduce or avoid one billion metric tons (a gigaton) of greenhouse gas emissions in the global value chain by 2030. Aligned with the Paris Agreement’s original 2-degree Celsius warming scenario and designed in consultation with World Wildlife Fund (WWF), Environmental Defense Fund (EDF) and CDP, Project Gigaton's^TM success would represent a substantial reduction of Scope 3 emissions within Walmart’s and our suppliers’ value chains.

Beyond Project Gigaton^TM action and reporting, Walmart estimates and reports certain Scope 3 categories — including purchased goods and services and use of sold products — through our annual CDP submissions; Walmart’s 2021 submission can be viewed here.

Achieving the Project Gigaton^TM goal of reducing or avoiding 1 billion metric tons of CO₂e emissions by 2030 would represent a substantial, Paris-aligned reduction of Scope 3 emissions from Walmart’s and our suppliers’ value chains.

For a retailer like Walmart, Scope 3 emissions include multiple upstream and downstream categories, including purchased goods and services and use of sold products. Examples include the emissions associated with washing and drying an article of clothing over its lifetime or emissions from growing, harvesting, transporting, eating and disposing of fresh produce. Many factors impact an item’s footprint and there are no precise ways to measure these emissions, so estimates must be employed.

Walmart’s objective in creating Project Gigaton^TM was to start the consumer goods industry on the path toward decarbonization by spurring immediate, concrete action to avoid or reduce upstream and downstream emissions. Methods used today to calculate Scope 3 emissions did not exist at the time; to set an ambitious and science-based target, we began with an estimate that approximately 95% of a retailer’s emissions were in Scope 3. Using Walmart’s 2015 Scopes 1 and 2 emissions as a baseline (originally reported to CDP as 21.04 MMT CO₂e), we assumed that our 2015 Scope 3 emissions were approximately 400 million metric tons CO₂e.¹² A Paris-aligned reduction of 2.5% per year would represent a cumulative reduction of approximately 1 billion metric tons (one gigaton) of emissions over the life of the initiative.

The Science-Based Targets initiative approved Project Gigaton^TM as part of Walmart’s original science-based target in 2016. We then worked with CDP, WWF, and EDF to design a methodology to capture the real-world emissions avoidance and reduction impacts of supplier action, which is set forth in the Project Gigaton Accounting Methodology. Project Gigaton^TM was officially launched in 2017.

We remain focused on the success of Project Gigaton^TM and driving real, measurable progress with our suppliers as part of our ambition to play a leading role in helping the world achieve net zero emissions by 2050.

With respect to Walmart’s own supply chain and Scope 3 footprint, Walmart has been reporting estimated Scope 3 emissions in its two largest categories — (1) purchased goods and services and (2) use of sold products — using CDP-approved methodologies and reporting them through CDP. For 2020, we reported that our estimated emissions for these categories for Walmart U.S. were 130.2 and 32.2¹³ MMT CO₂e, respectively.¹⁴

In 2022, we are reassessing our overall Scope 3 footprint, action plan, measurement methodologies, and disclosures.

We work with suppliers through Project Gigaton^TM to set targets and take science-based, measurable action in six arenas critical to decarbonizing value chains. Since launch, more than 4,500 suppliers have signed up, making Project Gigaton^TM one of the largest private sector consortia of its kind. Suppliers are invited annually to report through Project Gigaton^TM and choose whether to report, as further set out in the Project Gigaton TM Accounting Methodology. During the 2021 reporting cycle:

• More than 2,500 suppliers reported through the Project Gigaton^TM platform. WWF and EDF review select suppliers submissions under Project Gigaton^TM.  
• Suppliers reported having reduced or avoided more than 158 MMT of CO₂e, for a cumulative total of more than 574 MMT of CO₂e since 2017.  

Project Gigaton^TM Action Areas¹⁴
Million Metric Tons (MMT) CO₂e

Project Gigaton^TM is designed to catalyze real, measurable impact in product supply chains. It works in the following ways:

Democratizing Climate Action: The Project Gigaton^TM platform is designed to accommodate suppliers who vary in their readiness and capability of undertaking intensive GHG reduction efforts. The platform offers resources such as guidance on goal-setting, workshops on best practices and playbooks and other documents that help companies get started. In 2021, suppliers reporting to Project Gigaton^TM ranged in size from $1 million to $14 billion in U.S. product net sales.

Driving Decarbonization of the Most Critical Parts of the Supply Chain: The platform encourages suppliers to take action across the six areas that are the most critical in reaching zero emissions and most relevant to our suppliers’ businesses: energy use, nature, waste, packaging, transportation and product use and design.

Providing Access to Science-Based Resources: Project Gigaton^TM includes useful tools including calculators, playbooks and programs to guide action and inspire innovation. For example, suppliers can answer a series of questions about packaging changes, and our calculators will help them determine the emission factor used, enable them to report accurate information for Project Gigaton^TM and provide data to spark ideas for additional improvements. We also host workshops for suppliers with coaching from NGOs on how to best use the calculators to further their efforts, co-created a collaborative Power Purchase Agreement open only to Walmart suppliers, and worked with CDP and HSBC to provide an early-payment program for suppliers who set science-based targets or have achieved certain score thresholds from CDP.

Ratcheting Ambition: The program is designed to promote increased ambition over time through recognition. Suppliers can sign up, start setting goals, take action, strive to achieve Sparking Change status and then strive to achieve Giga Guru status:

• Sparking Change: Suppliers that have set SMART (Specific, Measurable, Achievable, Relevant and Time-limited) goals, agreed to share them publicly and reported reducing or avoiding emissions in the most recent reporting year. In 2021, more than 750 suppliers were recognized for Sparking Change. 
• Giga Gurus: Suppliers that have set SMART goals in three pillars, agreed to share them publicly and reported reducing or avoiding emissions in three pillars during the most recent reporting year. To keep the level of ambition high, we increased the requirements to qualify for Giga Guru status in 2021 from setting goals and reporting in one pillar to setting goals and reporting in three pillars. In the 2021 reporting year, we recognized more than 1,000 suppliers as Giga Gurus.  

Walmart publicly recognizes suppliers achieving these milestones to thank them for their efforts and to inspire others to join and increase their ambition.

Read more about Project Gigaton^TM.

Our climate strategy includes adapting our operations and sourcing to enhance resilience. Examples include:

Disaster Resilience

Walmart’s Emergency Management Department uses predictive analytics to gauge the path and likely severity of seasonal weather events that can impact operations and supply lines. The Emergency Management team helps our operations and supply chain teams prepare for and mitigate the effects of such events. If disaster strikes, the Emergency Management team operates out of Walmart’s Emergency Operations Center, engaging associates, local governments, NGOs and others as needed. The team deploys associates with specialized expertise as well as mobile generators, fuel resources, trucks and other resources to manage crises on the ground. Storms impacting larger geographies, such as the February 2021 winter storm across the southern U.S., contributed to this trend.

Walmart and the Walmart Foundation also work to build capacity for preparedness and response in vulnerable communities through engagement of stakeholders, best practice sharing and philanthropic investments. For example, in FY2022 the Walmart Foundation granted $3 million to build capacity in underrepresented and vulnerable communities to help them prepare and mitigate against the impact of disasters, including to BIPOC-led organizations like the Institute for Diversity and Inclusion in Emergency Management.

Read More: Disaster Preparedness & Response

Real Estate

When designing facilities in storm-prone locations, we incorporate certain precautionary measures to help facilities withstand storms and recover as quickly as possible with minimal disruption in service. To help sustain access to electrical power when we need it most, we have invested in a fleet of permanent and mobile generators to support our distribution centers, stores and clubs during hurricanes, wildfires, winter storms and day-to-day power surges. For example, given the probability of storms impacting stores in the U.S. Gulf Coast and along the eastern seaboard, nearly all stores within a certain range of the coast have a generator or quick connects for mobile generators. Because permanent generators are not financially justifiable at all stores, we take other measures, including staging mobile generators and refrigerated trailers, to reduce the time it takes to respond to power outages. In 2021, we proactively staged over 1,200 refrigerated trailers at over 700 locations ahead of extreme weather events. Additionally, mobile generators kept stores, clubs and distribution centers powered to serve communities for more than 10,000 hours while grid electricity was not available. These measures not only enable us to serve customers when we would ordinarily need to close stores, but also help to reduce food loss by avoiding hours of power loss. As climate-related events increase in frequency and severity, we aim to stay in front of issues by preparing for what lies ahead.

Read More: Disaster Preparedness & Response

We have prioritized incorporating energy efficiency into new store designs and upgrading older equipment where economically feasible with higher-efficiency technology which will help us adapt to a warming climate. We also use technology to monitor and optimize energy use in our buildings. Energy—including electric and gas—is one of our top operating expenses and optimizing energy use can help us control both expense and emissions. A few degrees of rise or fall in average temperature can translate to considerable costs, as HVAC and refrigeration systems must work longer and harder to keep temperatures in stores and product cases at optimal levels.

Sourcing: Surety of Supply

Managing Day-to-Day Disruptions

Our merchants use a variety of tools to manage volatility and surety of supply day-to-day. Our sourcing teams manage food commodity supply risks by building upstream capacity, diversifying our sourcing regions and exploring new technology and innovation. For example, our merchants use predictive weather data to adjust product deployment and replenishment rates in the short term, as well as leverage historical data on sales performance and customer buying patterns to inform product assortment shifts over time. This helps ensure that as the climate changes, we continue to offer the right products for our customers at the right time.

Country of Origin Strategies

While about two-thirds of what Walmart U.S. spends on products comes from items made, grown or assembled in the U.S. (according to data from our suppliers), globally sourced items face the risk of climate-related disruption. Walmart’s Global Sourcing team regularly reviews risks and opportunities related to the country of origin of the products they source. The Global Sourcing team works with Walmart merchants and third-party experts to develop mitigation strategies, including measures to enhance supply chain resilience within countries of origin, as well as diversification of sources of supply.

Transforming Product Supply Chains for Long-Term Sustainability

Because agricultural commodities can be especially susceptible to severe weather events and to climate change, Walmart has prioritized strategic initiatives to enhance commodity supply chain sustainability and resilience. Walmart’s efforts include setting sourcing requirements and product specifications for suppliers, engaging suppliers in measurement and best practice sharing, supporting industry collaboration, engaging our customers, public policy advocacy, and philanthropy.

Read More: Product Supply Chains: Sustainability Overview

Managing Transition Risks

Transitioning to a net-zero economy will bring about regulatory, technological, legal, market and reputational changes that will likely impact companies, including ours. (See Climate Risk Assessment above.) We evaluate these risks as part of the company’s annual Enterprise Risk Management (ERM) process that considers strategic, operational, reputational, financial, and regulatory and compliance risks. The assessments include mitigation plans against critical risks, and ongoing or new issues are addressed through the strategic planning process. The results of these assessments are shared with Walmart’s Governance Risk Committee (GRC) and with the Audit Committee of the Walmart Board of Directors.

In addition to the ERM process, individual business segments and functions also assess climate-related policy issues as part of developing their annual strategic and operating plans. For example, regulation often affects costs in our operations and value chain. Walmart has established policy councils to assess potential new legislation/regulations and commitments within and across key markets. The policy councils include internal stakeholders from various parts of the organization (e.g., Government Affairs, Legal, Real Estate, Communications, and Compliance).

Another reputational risk comes from customer perception of Walmart’s climate action, including how we design and run our stores and the products we offer. Our corporate affairs teams monitor sentiment across customers, investors, associates, and other stakeholders via digital and traditional media engagement and coverage. Our stakeholders help us understand climate risks and opportunities so that we can develop more effective solutions.

Read more about our climate risk assessment section above and in our CDP Response.

We believe a strong climate strategy across government, business and civil society will help everyone manage the physical and transition risks associated with climate change, contributing to the resilience of our business and the communities we serve. We advocate for climate policy through engagement of policy makers, industry associations and multi-stakeholder coalitions, as well as through corporate communications.

Governance and Transparency

Climate Policy Priorities

Walmart is committed to policy advocacy aligned with the Paris Climate Agreement. Our advocacy has been consistent with that agreement since 2016. In 2021, we memorialized our commitment in a Board-approved Statement on Climate Policy. The Statement frames our advocacy around achieving 1.5° Celsius-aligned, science-based national and international climate policies that are consistent with achieving net-zero emissions by 2050 and that equitably address the needs of all stakeholders.

We believe market-based and economy-wide emissions-reduction policies, like a price on carbon, are critical to achieving ambitious reductions in greenhouse gas emissions while supporting economic prosperity. We also recognize that market-based, technology-neutral approaches for hard-to-decarbonize sectors can play a valuable role in the absence of economy-wide action.

Climate Policy Oversight

By charter, the Nominating and Governance Committee (NGC) of the Walmart Inc. Board of Directors — a Board committee comprised of independent directors — oversees our public policy strategies and activities, including those related to climate change. Management provides regular updates at least annually to the NGC concerning the company’s public policy strategy and highlights of the committee’s discussions with management are shared with the full Board of Directors. In 2021, NGC/management discussions included Walmart’s planned U.S. federal government affairs and policy priorities for 2021-2022 and a review of 2020-2021 activities, including engagement with and through key trade associations on climate change and other priority topics.

Walmart’s Government Relations Policy (updated in 2022) governs the company’s interaction with elected officials and legislative and regulatory bodies at all levels. As relevant to climate advocacy, the policy:

• Delineates roles and responsibilities with regard to interactions with public officials and legislative bodies;
• Sets parameters on the use of funds for political purposes;
• Defines the criteria for evaluation of trade association memberships in light of their policy positions and/or political advocacy;
• Commits the company to annual discussions between management and the NGC; and
• Commits Walmart to annual reporting on policy priorities, strategies, activities, and trade association memberships.

Transparency

Walmart is committed to transparency regarding public policy activities, including climate advocacy. Our disclosures include:

• Quarterly reporting on lobbying activities and expenditures, which include climate advocacy. 
• Discussions regarding our public policy priorities, advocacy strategy and engagements in our ESG reporting (since 2013).  
• State and federal lobbying information on our Investor Relations website (since 2015). 
• Our philosophy on trade association memberships and approach to dealing with trade association policy misalignments (see below and our Engagement in public policy ESG brief). 
• A list of trade associations to which Walmart Inc. contributes funds in an amount of $25,000 or more; we will update this list at least annually. 

Read more: Engagement in Public Policy

Direct Engagement of Policy Makers

Walmart directly engages U.S. policy makers on climate-related policy in line with our Statement on Climate Policy. We employ federal and state registered lobbyists and registered lobbyist consultants and engage in lobbying contacts as defined under the U.S. Lobbying Disclosure Act (LDA). Our quarterly reports to Congress include lobbying expenditures, the specific legislative items and public policy issues that were the topics of communication and the registered lobbyist who lobbied on behalf of the company. Review of Walmart’s reports discloses direct advocacy on climate and other environmental-related topics.

Recent examples of our direct public policy advocacy on major climate policy debates at the federal level in the U.S. include:

• Actively advocating, including meeting with key lawmakers, in support of the climate provisions of the Inflation Reduction Act (IRA), and assisting our key trade associations to develop constructive positions on these climate provisions.
• Engaging lawmakers to support the Infrastructure Investment and Jobs Act, which our major trade associations also supported, and which includes federal investments in the energy and transportation sectors and to support climate resilience.  
• Speaking out publicly and engaging lawmakers directly to emphasize the importance and urgency of the climate provisions in the Build Back Better legislation, as well as conveying support for carbon pricing and sector-based, technology-neutral approaches to decarbonize sectors like agriculture. 
• Recognizing bipartisan action on climate and submitting a letter of support to the U.S. Senate regarding the passage of the Growing Climate Solutions Act, which provides technical resources to farmers and ranchers to invest in nature-based climate solutions.    
• Joining members of the Air-Conditioning, Heating, and Refrigeration Institute in endorsing a petition to the U.S. Environmental Protection Agency (EPA) regarding the adoption of national rules to prohibit the use of refrigerants with high global warming potential. We believe this will create a valuable national approach to phasing out the most harmful refrigerants in an expeditious fashion. Walmart also submitted a letter to the EPA supporting regulatory actions for stationary refrigeration equipment that are environmentally effective (e.g., limiting the use of refrigerants in new commercial systems with charges over 50 lbs. to those using refrigerants with a GWP of 150 or less) and nationally consistent. 
• Collaborating with PepsiCo to release a set of public policy principles to convey to federal and state policymakers the types of policy interventions, planning and guidance that can support the efficient and economical transition to zero-emission commercial transportation fleets. These principles reflect our business strategy, promote efficiency and optimization as a reduction pathway and take a technology-neutral approach so that we can align our distribution network outcomes with environmental and community benefits.   

Walmart has also advocated for Paris-aligned climate policy on the global stage. For example, prior to COP26, we joined key public-private sector initiatives led by U.S. Special Envoy on Climate John Kerry. The first, Glasgow is Our Business, showcased strong CEO-level sector support for a successful COP26 agreement. The second, the Clean Energy Demand Initiative, works to convey demand and policy signals from large private sector buyers to drive clean energy investment in crucial global markets. We actively participated in business dialogues during COP26 and represented the official business observer groups in encouraging support and action on measures to solidify global carbon market rules and other policy elements in the Glasgow Climate Pact. And Walmart is active in statehouses across the United States, including joining other businesses to advocate for net-zero emissions in Maryland by 2045.

Corporate Communications

Through corporate communications, Walmart regularly engages the public to make the case for climate action and encourage others to raise their ambitions. Recent examples include:

• Speaking with key climate reporters
• Authoring blogs, op-eds and articles advocating for climate policy 
• Sharing climate stories, articles and milestones via social media  
• Participating in videos and podcasts 
• Engaging in forums such as the New York Times Climate Hub at COP 26, Greenbiz’s Verge Net Zero conference, Fortune’s Global Sustainability Forum, the WSJ Pro Sustainability Forum and the Financial Times’ Moral Money Summit: America’s Edition.

Engagement Through Trade Associations

Beyond direct advocacy on climate-related policy, Walmart is also a member of trade associations and coalitions that the company believes can assist us in achieving our long-term strategic objectives. These organizations and coalitions allow us to work with other companies on issues that impact the retail sector and beyond.

Walmart’s Approach to Engaging Trade Associations

Walmart supports trade associations for many reasons, including development and sharing of best practices on matters important to the industry, advocacy on behalf of industry interests, promotion of public policy and/or general support for an organization’s mission. Walmart’s engagement model depends on the role the trade association plays in helping Walmart achieve its strategic objectives, and may include varying levels of financial support, involvement at the board and/or with key committees or targeted financial support for key initiatives within a broader organization.

As Walmart transforms its business and trade associations reevaluate their priorities, misalignments may occur. Where they do, we directly engage our trade associations to help them understand our priorities and positions. We also periodically reevaluate our memberships and engagement models to ensure alignment.

• Engagement: We communicate our strategic priorities and perspective on matters of public policy with our trade associations, policymakers and — as appropriate — the public so that our positions are known. For example, we have shared our views on climate policy with key trade associations, the public and lawmakers (see below).
• Membership and Financial Support Reviews: We periodically review our memberships in trade associations and determine if any adjustments are needed in our membership status or the financial support we provide to the organization. Where we generally support the organization’s priorities and the positions the organization has taken on major issues, we may maintain general membership in the organization while working to influence the organization’s direction as necessary. For example, we maintain general membership in the Business Roundtable and work to influence the organization as described elsewhere in this brief. In other instances, we may elect only to provide financial support for particular organizational initiatives. For example, we do not pay general membership dues to the U.S. Chamber of Commerce but financially support certain specific U.S. Chamber of Commerce initiatives including the Institute for Legal Reform, Rule of Law Coalition and Workforce Freedom Initiative. If a relationship — on balance — does not align with our priorities, we would end ties with the organization altogether.

Engagement with Major Trade Associations on Climate Policy

We have not identified any material misalignments with our major trade associations with respect to climate policy matters. Nevertheless, in line with the overall approach described above, we engage trade associations on climate and related policy issues to help them understand our perspective. Examples include:

• Business Roundtable: The Business Roundtable advocates for public policy that promotes the U.S. economy and expanded opportunities for Americans. Walmart President and CEO Doug McMillon served as Business Roundtable’s Chairman in 2020-2021. We have endorsed Business Roundtable’s call for a U.S. national climate policy solution to reduce U.S.-based emissions by at least 80% by 2050 through a market-based mechanism that includes a price on carbon. Walmart worked with Business Roundtable on its statement expressing support for the climate provisions in Build Back Better and to craft a global statement on climate action that was endorsed by business groups in Australia, Canada, the European Union and Mexico. 
• National Retail Federation: The National Retail Federation (NRF) is the largest retail trade association in the U.S., representing large and small retailers with a variety of business models. NRF represents the retail industry across a broad range of policy areas including taxes, workforce and sustainability. In January 2022, in partnership with Walmart and other leading retailers, NRF released the “Retailers Reaching for Net-zero” guide, a document developed with the NRF Sustainability Council (of which Walmart is a member). The guide makes the business case for reducing greenhouse gas emissions, provides a pathway for setting science-based greenhouse gas emission reduction targets and provides an extensive resource list to assist retailers in reaching their own sustainability goals. In January 2022, Walmart U.S. President and CEO John Furner was elected chairman of the board of NRF. In this capacity he will further the engagement of the association in priority policy areas, including climate.  
• Retail Industry Leaders Association: The Retail Industry Leaders Association (RILA) brings together the nation’s leading retailers to advance the industry through public policy advocacy and operational excellence and innovation.  In April 2021, RILA released a set of climate priorities that summarize the member perspective and considerations on greenhouse gas emission reduction strategies and categories that closely intersect with the industry operations and that receive policy attention at the state and federal level. Walmart provided insights to RILA to help develop this report and supported its release. In February 2022, RILA released its Retail Climate Action Blueprint, which provides guidance applicable to retail organizations’ climate action strategies. Walmart provided feedback on the Blueprint and was quoted in the press release announcing its release. 
• International Chamber of Commerce: The International Chamber of Commerce (ICC) promotes international trade, responsible business conduct and a global approach to economic regulation. ICC has been the official Focal Point for Business in the United Nations Framework Convention on Climate Change (UNFCCC) process since its inception in 1992. At COP26, Walmart actively engaged and supported the Business and Industry NGO group (BINGO) managed by ICC. On behalf of this group, Walmart delivered a statement to the Parties during one of the high-level segments, which included language encouraging action on Article 6 and formalizing rules for global carbon markets. 
• Business at OECD: Recognized as the voice of business at the Organization for Economic Cooperation and Development (OECD), Business at OECD (BIAC) conveys business perspectives and expertise to policymakers on a range of economic and policy issues. Walmart is a Vice Chair of the Environment and Energy Policy Group, which helps OECD guide member governments to design and implement evidence-based policies that address environmental challenges and promote green growth. BIAC has provided feedback to the OECD in support of international discussions on climate, including the UN Framework Convention on Climate Change (UNFCCC), the G7 and the G20. The group has also provided feedback on how governments can best align economic stimulus measures related to COVID-19 with ambitions on climate change. 

Multi-Stakeholder Coalitions

In addition to working to shape climate strategies and advocacy within the groups discussed above, we are members of other coalitions advocating for an enabling policy environment, including:

• Race to Zero – Retail Campaign: We support the effort to achieve net zero emissions in the retail sector by 2050. That includes our role as co-lead of the Retail Race to Zero campaign along with IKEA, H&M, Kingfisher and Best Buy. In FY22, we represented the coalition at COP26 in Glasgow, where we welcomed several new signatories to the campaign and announced a new Accelerator program. 
• We Are Still In: We are a signatory to the coalition, which demonstrates our long-standing commitment to the Paris Climate Agreement. We also signed the We Mean Business/Ceres letter that supports a U.S. goal to cut emissions by at least 50% by 2030 and achieve net zero emissions by 2050. The group also endorsed the bipartisan Growing Climate Solutions Act, which reflects a valuable strategy for increasing carbon sequestration opportunities in the agricultural supply chain. 
• Clean Energy Buyers Association (CEBA): Walmart is a long-time member of CEBA (formerly REBA), a collaboration of clean energy buyers, energy providers and service providers that, together with NGO partners, seek a transition to a zero-carbon energy future. The group advocates for policies such as wholesale energy market expansion, flexible financing for renewables, retail access and a federal carbon green grid. We advised and endorsed CEBA’s statement on Build Back Better, which emphasized market and policy-based measures to decarbonize the grid. 
• Business for Nature (BFN): We are members of BFN, a global coalition that brings together business and conservation organizations to call for governments to adopt policies to reverse nature loss in this decade. In 2020, we supported BFN's Call to Action to reverse nature loss by 2030. BFN has been mobilizing members to provide official comment to inform the global biodiversity framework, which is set to be negotiated at the UN COP15 in 2022. We have actively participated in the drafting and development of these policy recommendations, have been a strong proponent of language that highlights that the climate and nature dialogues should be strongly linked and recognize the critical role nature plays in climate mitigation.
• LEAF Coalition: Walmart.org participates in the LEAF Coalition, a coalition bringing together the private sector and governments to provide finance for tropical and subtropical forest conservation commensurate with the scale of the climate change challenge, to learn along with our peers. 

Read More: Engagement in Public Policy

We believe that transparency cultivates trust, helps hold ourselves accountable and – we hope – inspires others to act. We provide an annual update on our climate progress here through our ESG Reporting. We also report to organizations such as CDP. Walmart estimates its scopes 1, 2 and partial scope 3 GHG emissions in accordance with the GHG Protocol Corporate Accounting and Reporting Standard and has disclosed this and other climate-related information annually since 2006. See our third-party assurance statement for our CY2021 Scope 1 and 2 emissions verification report here.

We encourage suppliers to report to CDP and have integrated CDP and Project Gigaton^TM to make it easier for suppliers to report on metrics. We also support the Taskforce for Climate-related Financial Disclosure (TCFD) and use its reporting and guidance for climate risk assessment.

• Climate change is one of the greatest challenges of our time, profoundly affecting all regions of the world and all sectors of society. While Walmart can play a leading role in its own business, supply chain and beyond, achieving the Intergovernmental Panel on Climate Change (IPCC) goal of reducing global greenhouse gas (GHG) emissions to net-zero by 2050 requires action from all parts of society.
• Certain factors beyond Walmart’s control impact Walmart’s ability to achieve its own targets, including changes to local energy grids; our physical presence in geographic areas without available necessary technology, equipment or capabilities; and weather patterns increasing the number of days requiring facility heating and cooling.
• Achieving our targets will require innovation and technology that is not available today, including the evolution and accessibility of refrigeration, electric vehicle (including Class 8, heavy-duty, long-haul tractors), renewable energy, manufacturing and agricultural technologies. A critical mass of potential consumers of these new technologies is a necessary precondition to their development, deployment and scaling.
• Walmart is dependent on the cooperation and performance of certain third parties, including business partners providing clean/green services and suppliers’ capacity and willingness to implement and measure emissions reductions projects.
• Public policies may not support actions aligned with Walmart's Science-Based Targets or the ambitions of the Paris Climate agreement, including by not encouraging the development and deployment of low-carbon or low-emissions technologies at scale and public policies that can negatively impact the supply or cost of renewable energy projects at scale.
• Walmart’s business will continue to evolve and grow. This growth and changes in our model may require additional facilities and/or an expansion of our footprint, which may create pressure on our targets.
• The capital and operating costs of implementing projects will be a factor (e.g., transitioning to low-GWP refrigerants). Low market prices and volatility of the price of fossil fuels can complicate the cost/benefit analyses.
• Value chain (scope 3) emissions measurement and reporting remains an immature field; lack of standardized approaches and comprehensive data sets limit the ability to generate comparable, reliable and decision-useful information.
• National and global catastrophic events, including pandemics, can exacerbate many of the above factors.

Revision History:
August 2022: Updated to reflect 2021 GHG emissions and related metrics.

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