Product supply chains: sustainability overview

SASB: FB-FR-430a.3; CG-AA-430b.3; CG-AA-440a.1
GRI: 102-9; 102-12; 103-1; 103-2; 103-3; 305-5; 308-2; 417-1
UN SDGs: 2, 8, 12, 14, 15
E S | Last Updated: July 7, 2021

Walmart aims to accelerate progress on the sustainability of our own assortment as well as product supply chains across the retail and consumer goods industry, with a focus on environmental and social issues including climate, nature, waste, working conditions, responsible recruitment and economic opportunity for people working in product supply chains, and the availability of affordable, safer and healthier food and other products.

Retail supply chains bring quality, affordable products to consumers around the world. Sustainable supply chains create value for companies and for society by mitigating business risks, increasing supply chain resilience and efficiency, improving product availability and quality, building trust and creating opportunities for workers.

Walmart’s supply chain reaches more than 100,000 suppliers globally and many of those suppliers also have their own supply chain. Walmart expects that the products we purchase and sell are made in the right way by suppliers who act ethically and respect the dignity of workers. Walmart’s stakeholders—including its customers—have the same expectations. In addition, companies like Walmart need to be part of the solution to environmental challenges such as climate change and depletion of natural capital in order to maintain our license to operate, uphold supply and create value for business and society through regenerative initiatives that draw on our unique corporate capabilities.

As a multicategory retailer operating around the world and with a global supply chain, Walmart engages suppliers, customers and NGOs in sustainability initiatives across a wide range of product supply chains. Because of the complexity of global supply chains and the systemic nature of issues such as climate change or forced labor, lasting improvement requires collaboration among many stakeholders.

To improve the sustainability of a given product supply chain, we start by listening to our customers and other stakeholders to set aspirations, such as emissions reduction or economic inclusion, and prioritize improvements to the product supply chain system, such as farming practices or commodity traceability. We make progress by:

• Setting standards and requirements for Walmart product sourcing
• Engaging Walmart suppliers to spark action, share best practices and tools and encourage measurement and disclosure
• Leading and contributing to industry consortia and initiatives to accelerate collective action beyond Walmart
• Helping Walmart customers make informed choices through labeling and cause campaigns
• Advocating for public policies that align with sustainable supply chain priorities
• Accelerating systems change beyond Walmart through philanthropic investments

Walmart uses sourcing requirements and specifications to signal demand for more sustainable products.

• Requirements: Our Standards for Suppliers outlines our expectations for suppliers and supply chains, including on the dignity of workers in the supply chain, environmental protection, food and product safety, and ethics and integrity. The Standards are supported by our Human Rights Statement and complemented by several supplier compliance policies, including our Global Forced Labor Prevention Policy, Global Responsible Sourcing Policy, and Global Food Safety Policy. Read more about Walmart’s approach to responsible sourcing, including our risk-based approach to monitoring and compliance with our standards: People in supply chains brief and our Walmart Policies and Guidelines page.

• Specifications: The most direct way to make a product supply chain more sustainable is through the product itself. For the products that Walmart carries, our merchants may specify attributes through the following mechanisms:

  • Issue-specific policies, guidelines and position statements: Walmart has developed sourcing policies, guidelines and position statements such as for seafood, apparel, plastic packaging and animal welfare that require products to meet certain criteria in order for Walmart to sell them. Read more: Walmart Sustainability Hub.
  • Certifications: We ask our suppliers to validate that particular commodities, including palm oil, pulp and paper, tuna, coffee, and cotton, have been produced to specific certification standards. Certifications help communicate to consumers that our suppliers have met the appliable environmental or social sustainability standards of the certifying body. We also work with suppliers to source from place-based efforts that help preserve natural ecosystems and improve livelihoods. Read more: Regeneration of natural resources: forests, land, oceans.
  • Product and packaging specifications: We ask our private brand suppliers to work toward and report progress on our goal to use 100% recyclable, reusable or industrially compostable packaging for our private brand products by 2025. Read more in the Waste: plastics and Waste: circular economy briefs.
• Special product sourcing initiatives: Walmart aims to advance economic inclusion through programs to source from diverse suppliers and suppliers in emerging markets, such as small producers in Mexico, India and South Africa. Read more: Equity & inclusion at Walmart and beyond and Supplier opportunity.

Walmart leads several programs to engage and support suppliers in pursuing ambitious environmental and social initiatives in their product supply chains (see Sustainable product supply chains: key business and philanthropic initiatives by issue table for an overview by sustainability issue). Our intention is to inspire action on complex global problems (e.g., climate change) by encouraging and assisting our suppliers to take first steps, disclose their progress, raise their aspirations and expand their impact.

A few examples:

• Project Gigaton: Since 2017, more than 3,100 suppliers have joined Project Gigaton, we have rallied more than 2,100 suppliers to set SMART (specific, measurable, achievable, relevant and time limited) goals to draw down emissions, and over 1,500 are reporting through the online platform. The project aims to avoid one billion metric tons (a gigaton) of greenhouse gases from our global value chain by 2030, inviting suppliers to take action in six areas: Energy, Agriculture, Waste, Forests, Packaging and Product use and design. The Project Gigaton online 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 provided by Walmart or third parties (e.g., the Gigaton Power Purchase Agreement (PPA), a collective renewable energy contracting initiative that provides suppliers market access to utility-scale PPAs). To date, suppliers report a cumulative total of more than 416 million MT of CO₂e avoided.¹⁸¹ Looking ahead, we will build out our Forest and Agriculture pillars to capture suppliers’ goals and progress related to natural capital.
• Packaging engagement: We encourage our suppliers to work toward 100% reusable, recyclable and compostable packaging and provide them with resources to help achieve that goal, such as the Sustainable Packaging Playbook and working sessions to share best practices to optimize packaging (e.g., our November 2020 Packaging Summit, attended by over 3,000 participants). We ask private brand suppliers to report their progress through our packaging survey.
• Responsible recruitment: We promote the use of responsible recruitment practices and implement the Employer Pays Principle, including by providing training resources for suppliers and factories (e.g., mitigating risk of involuntary labor in supply chains) and holding suppliers accountable to these principles through our Standards for Suppliers, audits and case management processes.  Another example is our work to help develop the Ethical Charter on Responsible Labor Practices, which establishes a common set of principles for how to responsibly produce fresh fruits, vegetables and flowers. The Ethical Charter is based on a foundation of employment law, good management systems and sound occupational safety and health practices. Read more: People in supply chains.

In addition, to encourage progress on environmental and social sustainability issues across product lifecycles, we ask our suppliers to report progress on KPIs through THESIS and other measurement platforms, such as CDP for GHG emissions and forests. Approximately 70% of our U.S. net sales were represented by suppliers who reported to one or more sustainability surveys.¹⁸²

Read more: Walmart Sustainability Hub and related Walmart ESG issue briefs.

To facilitate progress toward addressing complex and systemic sustainability issues across industry supply chains, we collaborate with other organizations in many consortia and initiatives (several of which we have founded) as illustrated in the Sustainable product supply chains: Key business and philanthropic initiatives by issue and Sustainable product supply chains: Focus areas by category tables.

For example, Walmart is:

• A member of the Consumer Goods Forum, which brings together leading retailers and consumer goods manufacturers to address social and environmental issues. Walmart co-leads or is an active member of the following Coalitions of Action established by the Consumer Goods Forum: Plastic Waste; Food Waste; Forest Positive; Global Food Safety Initiative; Human Rights – Working to End Forced Labor; Collaboration on Healthier Lives; and Product Data.
  
• Supporting the retail breakthrough campaign on the Race to Zero to achieve net zero emissions in the retail sector by 2050.
  
• A member of coalitions to conserve, restore or better manage landscapes; for example, we co-founded the Midwest Row Crop Collaborative, which has helped implement sustainable agriculture practices on over a quarter-million acres in the Upper Mississippi River Basin in the last four years.
  
• A core partner of the Ellen MacArthur Foundation, helping to launch and support industry engagement in Plastics Pacts in multiple countries to accelerate progress toward 100% reusable, recyclable and compostable packaging. In FY2021, Walmart also co-founded the Beyond the Bag coalition with Closed Loop Partners and a number of other retailers to develop innovative, industry-wide alternatives to single-use plastic bags.
  
• Working with the Leadership Group for Responsible Recruitment, CGF Human Rights Coalition on Forced Labor and the Seafood Task Force to help make responsible recruitment the norm and address forced labor in supply chains.
  
• A co-founder or member of multiple industry efforts to promote safer working conditions, including through Nirapon, an organization focused on monitoring ongoing safety compliance and maintaining the progress made through the Alliance for Bangladesh Worker Safety; the Life and Building Safety initiative; and the Ethical Charter on Responsible Labor Practices, which established industry principles for respecting human rights in the produce sector; over 100 of Walmart’s produce suppliers have confirmed their commitment to the Charter.
  
• A contributor to the U.N. Food Systems Summit, which facilitates best-practice sharing to transform the way the world produces and consumes food; active supporter of the Global Food Safety Initiative and the creator of the Walmart Food Safety Collaboration Center in China, now in its sixth year, which continues to bring together stakeholders across industry, government, academia and trade associations to address the root causes of foodborne illness. The center focuses on three aspects of the food safety system: innovation, education and policy support. The center’s work is also supported by a $25 million philanthropic commitment from Walmart and the Walmart Foundation (on track to be fulfilled by the end of 2021).
  

Read more: People in Supply Chains and the Regeneration of natural resources: Forests, land, oceans.

While we seek to improve the sustainability of all products, some customers seek specific attributes in products. To help these customers, we use in-store signage and encourage suppliers to label products. Examples of on-pack labeling:

• Certification logos: Certified products typically carry the relevant certification logo on pack (e.g., MSC; Rainforest Alliance); in some cases, we use in-store signage to call out products with social or environmental attributes (e.g., sustainable seafood shelf signage for Walmart U.S.). For more information on key commodities that we have committed to source sustainably by 2025, including metrics on relevant certified products, see: Regeneration of natural resources: Forests, land, oceans.
• Recycling labels: We have asked our private brand suppliers to label our food and consumable product packaging with consumer-friendly recycling information, and we encourage our national brand suppliers to provide similar label information. Our goal is for 100% of Walmart U.S. private brand food and consumable packaging to include the How2Recycle® label by 2022. In FY2021, 57% of Walmart U.S. private brand food/consumables supplier-reported sales came from items carrying the How2Recycle^® label and 67% of Sam’s Club U.S. private brand supplier-reported sales came from items carrying the How2Recycle^® label.¹⁸³ We are encouraging our national brand suppliers to make similar commitments through our Project Gigaton platform and through joining the U.S. Plastics Pact.
• Great for You icon: We developed the Great for You icon to identify private brand products that meet nutrition criteria informed by the 2015–2020 Dietary Guidelines for Americans, which was developed by the U.S. Food and Drug Administration, the U.S. Department of Agriculture and the Institute of Medicine. The icon is carried by nearly 8% of qualifying products, including fresh produce and the Great Value and Marketside private brands.
  

We advocate for public policies that align with our sustainable supply chain priorities. For example:

• To create a policy environment that enables climate action while promoting economic prosperity, we advocated for countries to support the Paris Agreement and Renewable Energy Buyers Principles.
• We are a member of the Consumer Goods Forum’s Forest Positive Coalition of Action, which works with governments to support forest-positive policies that focus on Brazil, China, the European Union and Indonesia.
• We advocated for responsible recruitment through the Bali Process and direct engagement with government leaders in southeast Asia.
• Through the Seafood Task Force, we support policies that address illegal, unreported and unregulated fishing to solve the social and environmental issues associated with these practices.
  
• As a member of the Midwest Row Crop Collaborative, Walmart supported the federal, bipartisan Row Crop Bill to encourage practices that support soil health.
  

Read more: Engagement in public policy.

Walmart and the Walmart Foundation’s sustainable supply chain strategies seek to accelerate systems change through philanthropic investments, including grants and in-kind support. These investments fund research to align stakeholders on scientific issues; support programs that strengthen social and environmental practices in farms and fisheries; empower workers, especially women and other marginalized people; enhance transparency and product traceability; and contribute to a policy environment that promotes sustainability.

For example, Walmart supports the Rainforest Alliance and Sustainably Grown (SCS) and their work to help banana farmers in Guatemala, Costa Rica, Ecuador, Colombia, Honduras and Mexico to enhance farm business management practices, minimize agrochemical use, conserve natural ecosystems and promote climate resilience.

Read more about our philanthropic work to address systemic supply chain issues: Regeneration of natural resources: Forests, land, oceans, People in supply chains and Human rights.

• Social and environmental challenges in supply chains are complex and are often the result of systemic issues including deeply entrenched economic practices and inconsistent government regulation and enforcement across countries in which products are made. These factors make it challenging for any single organization to have an impact.
  
• Walmart’s sustainable supply chain aspirations are dependent on the maturity, rigor and efficacy of third-party standards and initiatives, which requires a critical mass of suppliers and retailers to align on common standards and best practices. For certain practices, there currently is no universal set of standards for responsible or sustainable production and/or certification beyond compliance with the law (e.g., responsible recruitment, wage/hour). Furthermore, there are limits to the efficacy of tools used to monitor compliance with expectations.
  
• The success of sustainable product programs is dependent on suppliers’ capacity and willingness to meet high standards, as well as their performance and ability to scale practices across their supply chains. Innovation in manufacturing, agriculture and other product production technologies is necessary.
  
• Social and environmental issues in supply chains are often upstream and challenging to reach with traditional retailer oversight and monitoring tools. Lack of reliable data on source/origin of certain commodities and product ingredients and the way they are produced—as well as the blending and commoditization of product inputs and ingredients—complicates matters. The use of technology improving transparency and traceability (e.g., blockchain, vessel monitoring) can help, but adoption takes time and further innovation is necessary to meet these challenges.
  
• The breadth of Walmart's global product offerings and dispersed geographical reach of supply chains can present challenges for supplier engagement and nature-related risk identification and mitigation. Moreover, certain products can only be obtained from specific regions of the world, limiting options for alternative sources.
  
• Walmart’s ability to scale more sustainable options is dependent on customer preferences and demand (which can depend on the cost and convenience of such options) and the availability and cost of preferred products, ingredients, commodities and inputs. Growth and/or changes in our business can challenge our ability to meet customer demands consistent with our aspirations.
  
• The public policy environment in certain countries/regions does not support (and may undermine) more sustainable production at scale and at reasonable cost.
  

• Pandemics, weather-related events and political/social unrest can create supply/demand volatility and interrupt supply chains.

• Environmental Sustainability Statement 
• THESIS Index 
• Walmart Sustainability Hub 
• Human Rights Statement 
• Global Forced Labor Prevention Policy 
• Standards for Suppliers 
• Forests Policy 
• Seafood Policy 
• Animal Welfare Position 
• Animal Welfare – Swine Assurance Position 
• Antibiotics in Farm Animals Position 
• Cage-Free Egg Supply Position 
• Conflict Minerals Policy 
• Sustainable Chemistry Implementation Guide 
• People in supply chains
• Regeneration of natural resources: forests, land, oceans
• Climate change
• Waste: circular economy
• Waste: plastics
• Safer, healthier food & other products
• Supplier opportunity
  

Endnotes
About our reporting