Climate change

SASB: CG-MR-130a.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 | Last Updated: July 7, 2021

Our aspiration

Our aspiration

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 GigatonTM to reduce 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

Key goals & metrics

Goal
Metric
FY2019
FY2020
FY2021
GHG emissions 58
Achieve zero emissions across global operations by 2040Annual greenhouse gas (GHG) emissions (million metric tons carbon dioxide equivalent – MT CO2e)

CY2017

Total: 18.68

Scope 1: 6.52

Scope 2 (market-based): 12.16

CY2018

Total: 18.12

Scope 1: 6.10

Scope 2 (market-based): 12.02

CY2019

Total: 17.56

Scope 1: 6.48

Scope 2 (market-based): 11.08

Reduce absolute scopes 1 & 2 GHG emissions 35% by 2025 and 65% by 2030 from 2015 base year59 (approved as science-based and classified as 1.5°C-aligned, Science Based Targets initiative (SBTi))Percent change in annual scopes 1 & 2, compared to 2015 baseline

CY2017

6.1% decrease

CY2018

8.7% decrease60

CY2019

12.1% decrease61

Percent change in scopes 1 & 2 annual emissions

CY2017

4.4% decrease

CY2018

4.5% decrease62

CY2019

1.3% decrease

Carbon intensity (scopes 1 & 2) (MT CO2e per $M revenue)63

CY2017

37.33

CY201864

35.63

CY2019

33.52

Percent change in carbon intensity, per revenue (vs. previous year)65

CY2017

7.2% decrease

CY2018

7.1% decrease64

CY2019

3.1% decrease

Reduce or avoid one billion metric tons (MT) of scope 3 CO2e emissions by 2030 (Project GigatonTM)66Avoided CO2e emissions reported by suppliers cumulatively since CY2017>93 million MT67>230 million MT>416 million MT
Avoided emissions reported by suppliers in reporting year>58 million MT>136 million MT>186 million MT
Number of suppliers reporting>380>1,000>1,500
Percentage of U.S. net sales dollars represented by reporting suppliers6960%
Energy 58
Power 50% of our operations with renewable sources of energy by 2025 and 100% by 2035Estimated percentage of global electricity needs supplied by renewable sources68CY2018
28%
CY2019
29%
CY2020
36%
Estimated total energy consumed globally, gigajoules (GJ)CY2017
>161,000,000
CY2018
>155,000,000
CY2019
>153,000,000
Estimated percentage of total global energy consumed that was supplied from grid electricityCY2017
64.5%
CY2018
64.0%
CY2019
63.6%

See all data and progress toward goals and commitments in our ESG Data Table.

Relevance to our business & society 

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 in the coming decades to reduce agricultural yields, force people from their homes, endanger lives and destroy infrastructure.

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 also need to be part of the solution to manage physical and transition risk, maintain societal license to operate, and to 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 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.

Walmart’s approach

We seek to lead on climate action. We focus on achieving our science-based targets for emissions reduction in our own 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 many 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 climate risk assessment
  • Mitigating emissions through science-based targets in our operations (aiming for zero emissions by 2040) and with suppliers (through Project GigatonTM)
  • Adapting our business (e.g., facilities and sourcing) to be more resilient in the face of climate risk
  • Advocating by leading one of the largest private sector consortia for climate action, contributing to public policy and engaging in thought leadership
  • Reporting progress with science-based methodologies and giving suppliers ways to set targets and report

Key strategies & progress

Governance | Climate risk assessment | Mitigation | Adaptation | Advocacy | Reporting

Governance

Climate strategy is a key part of Walmart’s ESG strategy. The Walmart 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 overseen by the ESG Steering Committee and reviewed at least annually by both the Walmart executive leadership team and the Nominating and Governance Committee of the Board of Directors.

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).

Climate mitigation and adaptation initiatives are incorporated into the annual operating plans of each relevant function, and business leaders are held accountable for achieving operational targets.

Climate risk assessment

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-terms.

Scope of analysis

Physical risk assessment (RCP 8.5)

Modeled risk
Climate variables
Considerations for mitigation and adaptation
Retail stores and retail-related facilities 
  • Increased heating and cooling cost
  • Damage to buildings and inventory
  • Heat
  • Extreme wind
  • Extreme precipitation
  • Flooding (riverine and coastal)
      Supply chain
      • 11 commodities (avocados, animal feed, milk, oranges, rice, coffee, cocoa, cotton, beer hops, almonds and shrimp) considered at risk from climate change
      • Commodity shortages due to temporary or permanent yield reductions (e.g., coffee, cotton and cocoa) 
      • Disruption in production and distribution of products reliant on agriculture (e.g., cotton textiles)
      • Heat
      • Drought
      • Extreme precipitation
      • Flooding (riverine and coastal)
      • Extreme wind
      • Surety of supply initiatives 
      • Local sourcing efforts 
      • Country of origin assessments 
      • Resilient produce sourcing 
      • Sustainable commodities initiatives 

      Communities

      • Displaced associates and customers, reducing proximity to retail stores
      • Physical and mental health impacts 
      • Financial well-being 
      • Flooding (riverine and coastal)
      • Heat
      • Extreme wind

      Transition risk assessment

      Cost of scope 1 & 2 emissionsPrice on carbonZero emissions
      Read more about the additional factors we considered qualitatively but did not formally model below.

      Methodology & findings

      To assess physical risk, we used representative concentration pathway (RCP) 8.5, a scenario that assumes the absence of further decarbonization on the planet. 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 analysis70 mean it cannot be used to predict the net impact on Walmart’s financial results of operations or business operations, it nevertheless provides 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 material 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 variables likely to 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 energy initiatives and other mitigation and adaptation initiatives.

      historical-costs-change-map.jpg

      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 work with suppliers to implement 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), heat and extreme wind (e.g., hurricanes). 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, not to mention 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 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 utilities, 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.

      Additional transition risks considered 

      Regulation (current and emerging) 
      Examples

      • Changes to carbon pricing regimes (e.g., RGGI, CA AB 32, WCI and country level carbon taxes)
      • State and Federal Level energy targets and requirements (e.g., Renewable Portfolio Standard (RPS))
      • Changes to HFC refrigerant regulations (e.g., Kigali Agreement, U.S. AIM Act, E.U. F-Gas)
      • Policy targets, fuel and engine standards associated with increasing usage of zero emissions vehicles (CA ACT rule, Interstate ZEV MOU)
      • Changes to energy and water efficiency standards for buildings and equipment
      • Changes to subsidies and incentives related to demand-side energy management and renewable energy generation (e.g., U.S. ITC, PTC, feed-in-tariffs)
      • Introduction of product taxes, labeling regulations and design standards for carbon- or water-intensive product categories (e.g., meat, dairy, nuts, produce, appliances)

      Approaches to managing risk

      • Policy monitoring and modeling; integration into business and financial planning
      • Engagement in stakeholder forums associated with regulatory processes and rule-making
      • Emissions reduction initiatives; energy efficiency, renewables, phasing out of HFC refrigerants, transitioning to zero emission vehicles, Project GigatonTM

      Technology
      Examples

      • Advances in fossil-fuel mining and petroleum production that keep fossil-fuels prices low, adversely affecting the economics of emission reduction initiatives
      • Changes in low-carbon technology and manufacturing that cause existing assets to decrease in value, competitiveness or become absolute (e.g., onsite EV chargers become underutilized if hydrogen becomes dominant for passenger vehicles)
      • Advances in low-carbon and renewable generation and manufacturing that bring down the levelized cost of energy (LCOE) making existing long term power purchase agreements less valuable in comparison (e.g., older generation wind farms)

      Approaches to managing risk

      • Monitoring technology trends and forecast scenarios
      • Building flexibility into infrastructure changes
      • Leasing assets rather than investing directly

      Legal 
      Examples

      • Patchwork of disparate city or state level regulations (e.g., energy regulations) rather than consistent, national regulations, making compliance more complex and costly
      • Risk of events in the wake of climate-related extreme weather events, such as looting, harm to employees or customers and shareholder concerns 

      Approaches to managing risk 

      • Monitoring and assessing regulations and legal risks on an ongoing basis 
      • Advocating for consistent, science-based, environmentally and economically effective federal level climate policy

      Market
      Examples

      • Changes in energy and commodity prices driven by climate-related weather events, consumption behaviors and policies, resulting in higher costs
      • Changes in refrigerant pricing and supply volumes affecting costs and availability
      • Changes in consumer demand for low carbon products and services  
      • Changes in demand for gasoline and automotive replacement parts (e.g., motor oil) due to shifts in transportation technology mix (e.g., rising penetration of electric vehicles)
      • Prolonged climate-related events affecting macroeconomic conditions with knock-on effects on consumer spending and confidence 
      • Changes in investment preference towards companies with environmental and emissions performance

      Approaches to managing risk

      • Monitoring market trends
      • Emission and energy reduction initiatives; energy efficiency, renewables, phasing out of HFC refrigerants, transitioning to zero emission vehicles
      • Scenario modeling as part of energy/emissions opex and capex planning
      • Closely monitoring consumer trends
      • Report climate and environmental performance to investors

      Reputation
      Examples

      • Customer perception of climate issues and Walmart’s climate action, including how we design and run our stores and the products we offer, affecting customer loyalty
      • Stakeholder perception of Walmart’s response to climate-related crisis (e.g., hurricanes, floods, fires, power outages) at community and national levels
      • Stakeholder perception of our engagement in climate-related policies, affecting license to operate
      • Associate perception of Walmart climate action and management of climate-related issues, affecting our ability to recruit and retain talent

      Approaches to managing risk

      • Monitoring customer, investor and stakeholder sentiment via digital and traditional media engagement and coverage
      • Engaging regularly with stakeholders to understand and address their perspectives, build awareness regarding climate strategy into communications and marketing initiatives
      • Continuously improving Walmart capabilities in climate mitigation and adaptation

      Mitigation

      Walmart’s climate change mitigation strategy includes our efforts, aligned with the Science Based Targets initiative (SBTi), to eliminate emissions in our operations (scopes 1 and 2) by 2040 and aim to avoid one billion metric tons (a gigaton) of greenhouse gases in the global value chain (scope 3) by 2030 by inviting suppliers to set targets and take action through Project GigatonTM.

      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, 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 12.1% reduction in scopes 1 and 2 emissions between our 2015 calendar year baseline and 2019.76 77

      Target
      How we'll get there
      Scopes 1 & 2
      Reduce absolute GHG emissions by 35% by 2025 and 65% by 2030 compared with 2015 levels (approved as a science-based 1.5oC target by the Science Based Targets initiative)78

      Energy efficiency

      Renewable energy

      Reducing harmful refrigerants

      Transportation

      Onsite fuels

      Scope 3
      Avoid 1 billion MT (a gigaton) of emissions in our collective value chains by 2030 (approved as a science-based 2oC target by the Science Based Targets initiative)Project GigatonTM

      Renewable energy

      Electricity is the biggest contributor to our operational carbon emissions. We are committed to 100% renewable electricity by 2035—both through systems installed at our facilities and through purchases from external providers. In 2020, an estimated 36% of our global electricity needs were supplied by renewable sources.72 We have more than 550 onsite and offsite projects in operation or under development in eight countries and 30 U.S. states and Puerto Rico representing more than 2.3 gigawatts of new renewable generation capacity. 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 April 2021.

      As a step toward 100% renewable energy, we set an incremental goal to produce or procure 7 billion kWh of energy per year by the end of 2020 (600% increase from 2010). In 2020, 4 billion kWh of renewable energy was operational, with an additional 3 billion kWh procured (under contract). We expect these 3 billion kWh to be fully operational by 2022.

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

      Efficiency

      We’re 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, from compiling monthly store reports to triggering variance alarms, diagnosing equipment problems, validating performance of new equipment tests and engaging associates in campaigns and competitions to improve their energy use.

      Transportation

      We are working to electrify our fleet and reach net-zero emissions from all our vehicles and transportation network, including long-haul trucks in the U.S. and Canada, by 2040. Building on our success of doubling our truck fleet’s efficiency between 2005 and 2015, we work with equipment manufacturers, policymakers, utilities, transportation working groups and other organizations to achieve our goals. To accelerate progress, we are looking to meet the unique demands of our business with a portfolio of different technologies, including but not limited to renewable diesel, electric battery and hydrogen fuels. We have already started piloting vehicles in the U.S. using some of these technologies, and our business in India deliver items exclusively on electric motorcycles in many areas. We’re also working to transition long-haul/heavy-duty Class 8 tractors, where the technology is still in early stages and infrastructure to support these vehicles is currently not in place. To overcome this barrier, we will work with trusted equipment manufacturers and others on testing solutions. We believe we can act as an industry leader to articulate the necessary changes that will lead to a zero-emission business future.

      Onsite fuels

      A key part of our decarbonization strategy is to reduce our dependance on combustible fossil fuels for heating, cooling and backup power by increasing efficiency, transitioning to cleaner fuels and electrifying equipment. Electrification of equipment is already underway at our stores and clubs in the U.S. For example, over the past year we’ve added electrical connection points at our stores so that units like our refrigerated trailers that provide temporary storage capacity during the holidays can be powered by electricity when stationary.

      Refrigerants

      Delivering affordable and safe fresh and frozen food to millions of people in pleasant shopping environments requires refrigeration and air-cooling equipment that uses considerable amounts of energy and refrigerants such as hydrofluorocarbons (HFCs). In addition to increasing efficiency and sourcing renewable energy (as described above), we are working to eliminate emissions from these systems by managing leaks and phasing down use of high global warming potential (GWP) HFC refrigerants. We already operate hundreds of facilities (stores and distribution centers) that utilize ultra-low GWP refrigerants including carbon dioxide (CO2), glycol and ammonia (NH3). We identify and implement best practices for leak detection, repair, maintenance, refrigerant reuse and innovation, using laboratory-based tests and working with industry-leading consultants. Such efforts have resulted in an average leak rate across our U.S. store operations that we estimate to be less than half of the EPA-stated supermarket industry average. We work with our equipment and refrigerant manufacturers on the necessary changes these new systems will require both in design as well as supporting the technical training and parts necessary to service these new technologies as they roll out. We also advocate for consistent, science-based, effective and commercially viable policies to help facilitate the needed transition of the broader industry toward a net-zero future.

      associate-freezer-aisle.jpg

      Walmart’s progress on operational emissions (scopes 1 & 2)
      Between our 2015 baseline and 2019, we reduced our absolute scopes 1 and 2 GHG emissions by 12.1% 75; we believe we are on track to meet our science-based target of a 35% reduction by 2025. We also reduced our carbon intensity by 19%, as measured by MT CO2e per $M revenue.73
      Operational-emissions-reduction.jpg

      Supply chain (scope 3)

      CDP-supply-chain-sector-ratios.jpeg
      Climate Change

      Because most emissions in the retail sector lie in product supply chains (scope 3) rather than in stores and distribution centers (scopes 1 and 2), we launched Project GigatonTM to engage suppliers, NGOs and other stakeholders in climate action.

      Project GigatonTM aims to avoid one billion metric tons (a gigaton) of greenhouse gases in the global value chain by 2030 by inviting suppliers to set targets and take action in six areas: energy use, product design and use, waste, packaging, deforestation and sustainable agriculture.

      We want to democratize climate action by making resources available for any supplier to get started and increase their ambition and impact over time—sparking the large-scale engagement and innovation needed to decarbonize supply chains and achieve a net-zero future. We have designed the Project GigatonTM platform to accommodate suppliers who vary in their readiness and capabilities to undertake intensive GHG reduction efforts. The platform offers resources such as calculators to help set and report on goals within the initiative, workshops on best practices and links to additional resources and initiatives, described in more detail below.

      Several organizations have supported the effort, including World Wildlife Fund (WWF), Environmental Defense Fund (EDF) and CDP. They help us improve the methodologies, review supplier submissions, support several of our Gigaton-related initiatives and lead many initiatives of their own to draw down emissions across global supply chains.

      More than 3,100 suppliers have formally signed on, making Project GigatonTM one of the largest private sector consortiums for climate action. We have recognized 883 suppliers as Giga Gurus, a title provided to project participants that have set SMART goals (Specific, Measurable, Achievable, Relevant and Time‐limited), agreed to share them publicly and reported avoiding emissions in the most recent reporting year. We’ve also recognized 490 suppliers as Sparking Change agents because they have either set SMART goals and agreed to share them publicly or have reported avoiding emissions in the most recent reporting year.

      Under Project GigatonTM, suppliers report having avoided more than 186 MMT of CO2e in 2020, for a cumulative total of more than 416 MMT of CO2e avoided since 2017.74

      Climate Change

      * Uncategorized emissions avoided total ~3.5 MMT. Adding these uncategorized emissions to the emissions avoided in 2020, as detailed in the table, brings the cumulative total emissions avoided to 186 MMT CO2e.

      Project Gigaton TM action areas

      Suppliers can make commitments & pursue initiatives in one or more of six areas
      Action area
      Actions we encourage suppliers to take
      EnergyAvoid energy-related emissions in two ways: 1) reduce energy demand through optimization and efficiency and 2) transition to energy sources that are renewable and emit little to no carbon.
      Product use & designDesign products to reduce emissions throughout the product lifecycle, from use of raw materials in manufacturing the product (e.g., incorporating recycled content; meat alternatives) through to consumer use (e.g., LED lightbulbs).
      WasteAddress food, product and material waste that come from factories, warehouses, distribution centers and farms and contribute to GHG emissions. Reducing and diverting waste from landfills also can increase operating efficiency and lower costs.
      NatureForests: Protect, manage and restore forests through certification, monitoring, sustainable sourcing regions, collaborative action and advocacy. As part of our goal to become a regenerative company, we seek to become forest positive.
      Agriculture: Adopt regenerative agriculture and best practices in agriculture, such as manure management, methane emissions from animals’ digestive processes management, feed management and other activities, including efficient fertilizer use in crop production.
      PackagingReduce unnecessary packaging, use better packaging materials and increase packaging reuse and recycling. Walmart is taking specific aim at plastics with expanded waste reduction commitments for our U.S. private brands.

      Walmart has developed resources to help our suppliers and the retail and consumer goods industry in general reduce emissions in product supply chains. Walmart and the Walmart Foundation have also made philanthropic investments to help society make faster progress on reducing emissions. Recent initiatives in 2020 have included:

      • Goal setting: Walmart provides science-based calculators to help suppliers translate their actions into emissions impact associated with Project GigatonTM goals. For example, suppliers can answer a series of questions about packaging changes, and our calculators will help them determine the emission factor used and enable them to report accurate information for Project GigatonTM. We also hosted supplier workshops with coaching from NGOs. 
      • Energy: Walmart launched the Gigaton PPA (GPPA), an initiative to accelerate renewable energy adoption by offering suppliers the opportunity to participate in aggregate, utility-scale power purchase agreements (PPA)s. We have also created a new tool that assists factories to become more energy efficient, tracking energy use and reductions, and converting those savings to GHG reductions; over 490 factories have signed up to date. 
      • Waste: Walmart encourages suppliers to measure and report food waste and introduce practices for reprocessing, donating and recycling unused food. Walmart has also joined the “10x20x30” initiative, in which 10 of the world’s largest food retailers will engage 20 of their priority suppliers to halve food loss and waste by 2030. Also in support of 10x20x30, the Walmart Foundation has awarded a grant to the World Resource Institute (WRI) to provide training and technical assistance to organizations on reducing food waste and loss, and to share insights across the food industry.  Read more: Waste: Circular economy.
      • Packaging: Walmart’s publicly-available Walmart Recycling Playbook and related resources include tools, trainings and informative videos for consumer goods companies to make packaging changes that can reduce waste as well as emissions. This year, we held a virtual Packaging Innovation Summit with more than 3,000 suppliers  and leading sustainable packaging advocates, to help suppliers accelerate progress on sustainable packaging. To reduce reliance on plastic bags, we became a Founding Partner of Closed Loop Partners’ Beyond the Bag effort, a three-year initiative aims to identify, test and implement viable design solutions and more sustainable models for retail bags. Read more: Waste: circular economy and Waste: plastics.
      • Product use and design: Walmart supported product manufacturers in their effort to offer customers innovative, more sustainable products. For example, in 2020 172 Walmart suppliers reported incorporating recycled content into product design, which can reduce the overall carbon footprint of the product and contribute towards Project GigatonTM
      • Nature: Walmart and the Walmart Foundation announced enhanced efforts to conserve, restore and better manage at least 50 million acres of land and one million square miles of ocean by 2030.  Scientists estimate that natural resource initiatives can provide one-third of the solution to climate change.  (Read more: Regeneration of natural resources: forests, land, oceans.)  Two of our six Project GigatonTM action areas focus on nature:
        • Agriculture: Walmart invites our suppliers and others to join us in promoting more sustainable practices in animal agriculture and row crops. For example, Walmart is a founding member of the Midwest Row Crop Collaborative (MRCC), which brings together retailers, suppliers and conservation organizations to help farmers in the U.S. heartland adopt farming practices that can reduce greenhouse emissions, improve soil health and water quality, and lower costs. In 2020, the Walmart Foundation funded Forum for the Future to convene stakeholders across sectors and uncover systemic barriers to regenerative agriculture; funded the Soil Health Institute to work with cotton farmers to understand and implement practices that improve soil health; and provided a grant to WWF to help launch a million-acre grazing initiative aimed at restoring grasslands and addressing climate change. 
        • Forests: In 2020, the Walmart Foundation invested over $1 million in improvements to the World Resources Institute’s Global Forest Watch tool, a publicly accessible global platform for monitoring deforestation, and funded $2 million to the MapBiomas project through a grant to the Institute for Climate and Society to produce more accurate estimations of land use-related GHG emissions.  

      Read more about Project GigatonTM.

      Climate Change

      Adaptation

      Our climate strategy includes adapting and enhancing the resilience of our operations and sourcing. 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 minimize 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. They deploy associates with specialized expertise as well as mobile generators, fuel resources, trucks and other resources to manage crises on the ground. 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 impacts to 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. In addition to generators, which are not financially justifiable at all stores, we also take other measures, such as pre-planning and coordination, to reduce the time it takes to respond to power outages. Such measures 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 in the Disaster preparedness & response brief.

      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 costs are typically the second- or third-largest operating expense for our business; 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. As another 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, to help ensure that as climate changes we continue to offer the right products for our customers at the right time.

      Country of origin strategies

      According to data from our suppliers, about two-thirds of what Walmart U.S. spends on products comes from items made, grown or assembled in the U.S. To help manage the risk of disruption of globally sourced items, 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 weather events and to climate change, Walmart has prioritized strategic initiatives to transform such supply chains for 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 customer; public policy advocacy and philanthropy. Read more: Product supply chains: Sustainability brief.

      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. 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 results of these assessments are shared with Walmart’s Ethics, Compliance and Risk Committee (ECRC) and with the Audit Committee of the Walmart Board of Directors, and issues are prioritized for management action and assigned to business teams to address and report back to the ECRC and/or board.

      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, 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 customer, investor, associates and other stakeholder sentiment via digital and traditional media engagement and coverage, and 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.

      Advocacy

      Walmart advocates for 1.5oC-aligned, science-based national and international climate policies that are consistent with achieving net-zero emissions by 2050 and fairly and equitably address the needs of all stakeholders. We believe market-based emissions-reduction policies are critical to achieving ambitious reductions in greenhouse gas emissions while supporting economic prosperity. We actively support the goals of the Paris Agreement, participated and announced new deforestation commitments at the Global Climate Action Summit in 2018, and encouraged a strong, science-based U.S. climate target at the recent 2021 Biden Climate Summit. We believe business can and should be a significant part of the solution by innovating business practices and engaging stakeholders in collective action.

      We engage policy makers, customers, associates, other retailers and opinion leaders in support of climate action. Here are some examples of our approaches:

      • Consortia: Walmart’s Project GigatonTM is one of the largest private sector consortia for climate action. We also help lead and join in other collective efforts, including: Race to Zero, a UN global campaign to mobilize around net-zero efforts in the lead-up to COP26; America Is All In, a joint declaration of support for climate action from governors, tribal leaders, mayors, state legislators, local officials, colleges, universities, businesses, investors, faith groups, cultural institutions and health care organizations; and We Mean Business, a coalition to catalyze business action and drive policy ambition to accelerate the transition to a zero-carbon economy. 
      • Policy: Walmart advocates for 1.5°C-aligned, science-based national and international climate policies that are consistent with achieving net-zero emissions by 2050 and fairly and equitably address the needs of all stakeholders in line with our Board-approved Statement on Climate Policy.  We believe market-based emissions-reduction policies are critical to achieving ambitious reductions in greenhouse gas emissions while supporting economic prosperity. Walmart has endorsed the 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. The Business Roundtable action is also in accord with the Paris Agreement on climate change. Read more: Engagement in public policy.
      • Thought leadership: To make the case for climate action and encourage others to raise their ambitions, our executives speak with key climate reporters regularly; publish blog posts; place op-eds; share climate stories, articles and milestones via social media; speak at conferences; and engage in forums such as Bloomberg’s Sustainable Business Summit, Fast Company Innovation Festival, DealBook Strategy Forum, Fortune Brainstorm Tech, and the Financial Times’ Global Moral Money Summit.

      Reporting

      We believe that transparency cultivates trust, helps hold ourselves accountable and, we hope, inspires others to take action too. We provide an annual update on our climate progress through our ESG Reporting. We also report to organizations such as CDP. Walmart was the only multinational retailer to make make CDP’s Climate ‘A List’ and Supplier Engagement Leaderboard two years in a row — 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 here.

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

      CDP climate change questionnaire year
      2018
      2019
      2020
      Walmart Inc.: Response ScoreA-AA
      Walmart Inc.: Supplier Engagement Rating (SER)AA

      Challenges

      • 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 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 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.
      • National and global catastrophic events, including pandemics, can exacerbate many of the above factors.

      Additional resources