As a retailer with operations in more than two dozen countries and sourcing that spans the globe, Walmart is deeply committed to addressing climate change. We’re focused on strengthening business resilience, advocating for climate action and reducing emissions in our operations.
Because most emissions in the retail sector lie in product supply chains rather than in stores and distribution centers, we’re also working with suppliers through our Project Gigaton initiative to avoid a gigaton of greenhouse gas emissions from the global value chain by 2030. That’s the equivalent of taking over 200 million passenger vehicles off U.S. roads for a year.
Climate Change Mitigation and Adaption
We are focused on reducing emissions in our operations, engaging suppliers to reduce emissions in supply chains, strengthening the resilience of our business and using our voice to advocate for collective action.
In 2020, Walmart was the only global consumer packaged goods retailer to make CDP’s A List and Supplier Engagement Leaderboard for Climate. Walmart estimates its Scope 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.
We reduced our absolute Scope 1 and 2 greenhouse gas emissions by 7.7% between our 2015 calendar year baseline and 2018, keeping us on track to achieve our science-based target of 18% reduction by 2025.
Sustainable Supply Chain
Because most emissions in the retail sector lie in product supply chains rather than in stores and distribution centers (such indirect emissions are referred to as Scope 3 emissions), we started Project Gigaton in 2017 – our initiative to engage suppliers in climate action along with NGOs and other stakeholders.
Project Gigaton aims to avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030 by inviting suppliers to set targets and take action in six areas: energy use, sustainable agriculture, waste, forests, packaging and product use. The Project Gigaton platform includes a variety of resources, including calculators to help set and report on goals, best practices workshops, and links to additional resources and initiatives.
More than 2,300 suppliers have signed on, and since the effort launched in 2017, suppliers report a total of 230 million metric tons of avoided emissions.
Walmart and Schneider Electric, a leader in renewable energy purchasing, are collaborating on Gigaton PPA, an initiative to educate Walmart suppliers about renewable energy purchases and accelerate renewable energy adoption by participating suppliers through aggregate power purchase agreements. The GPPA initiative is designed to make it possible for more companies to learn about energy purchases, access renewable energy, reduce emissions and increase their ability to contribute towards Project Gigaton.
- Climate-related risk assessmentWalmart includes climate risk in the scope of the company’s annual risk management review.
In 2018, to better understand the potential long-term impact of climate change on the retail sector and our business, we engaged an independent third-party consultant to conduct a scenario-based climate risk assessment; we aimed to align with the scenario guidance set forth by the Task Force on Climate-related Financial Disclosures (TCFD). The analysis considered two scenarios for global warming (see table): global temperatures rise by 2° C, the upper end of the range targeted by the Paris Agreement, and global temperatures rise by 4° C, often called “business as usual.” Each scenario looked out to the years 2030 and 2050, making assumptions about four climate variables: temperature, drought/water stress, extreme weather events and sea level. In addition to these physical risks, the analysis also considered the transition risk of carbon pricing.
The analysis made many simplifying assumptions. For example, each variable was considered in isolation. It also did not consider second- or third-order effects, the potentially offsetting impacts of new technologies, mitigating actions or new business opportunities. While the limitations of the analysis mean that it can’t be used to predict net long-term impact on financials or business operations, it nevertheless helped to validate our current business strategies and initiatives for energy demand, commodity sourcing, value chain innovation, water management and resiliency.
For more information on this analysis, please see our 2020 ESG report or our 2019 CDP climate change disclosure.
- Mitigating the effects of climate changeMitigating the effects of climate change will require worldwide collective action to reduce greenhouse gas emissions. Because most emissions in the retail sector lie in product supply chains rather than in stores and distribution centers, we have committed to pursue substantial emissions reduction not only in our own operations but also across product supply chains by catalyzing and supporting initiatives among suppliers, NGOs, customers and others at scale.
- Adapting to the effects of climate changeInsights into climate risk have underscored the relevance of Walmart’s initiatives and long-standing capabilities in resilient operations and sourcing. Examples include:
Walmart’s Emergency Management Department uses predictive analytics to gauge the path and likely severity of seasonal weather events such as hurricanes that could 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. In the event of a disaster, they operate out of Walmart’s Emergency Operations Center, engaging associates, local governments, NGOs and others as needed, deploying associates with specialized expertise, mobile generators, fuel resources, trucks, and other resources to manage crises on the ground.
Because product supply chains such as produce can be especially susceptible to weather events and to climate change over time, Walmart has sought to enhance resilience by diversifying sources, encouraging suppliers to adopt more sustainable practices, experimenting with innovative seed varieties and controlled environments and reducing transport time
Renewable Energy and Efficiency
We aspire to meet 100 percent of our energy needs with renewable energy. In meeting this aspiration, we aim to power 50 percent of our operations with renewable energy by 2025—both through systems installed at our facilities and through purchases from external providers. In 2019, an estimated 29 percent of our electricity needs globally are now supplied by renewable sources.
We have more than 530 onsite and offsite projects and utility programs and partnerships in operation or under development in eight countries, 26 U.S. states and Puerto Rico. According to the U.S. Environmental Protection Agency (E.P.A.) Green Power Partnership and the Solar Energy Industries Association (SEIA), as of 2018, Walmart ranks second for total number of sites using on-site solar and second for total on-site solar power usage. Additionally, The American Wind Energy Association (AWEA) announced that Walmart purchased the most wind energy of any company in 2019, signing contracts for over 500 megawatts.
Walmart works every day to deliver affordable, fresher produce to millions of people in a pleasant shopping environment. Doing so requires the use of refrigeration and air-cooling equipment across our cold value chains—from our distribution centers, to our delivery vehicles, to our stores and clubs. This equipment requires a lot of energy; it can account for 30 to 40 percent of the energy consumption in our buildings. In addition, the refrigerant gases used in most systems—known as hydrofluorocarbons (HFCs)—are greenhouse gases. This makes managing and improving these systems a high priority.
We are working both to improve efficiency in current systems and to transition to new systems using refrigerant media with lower overall environmental impacts. Our approach focuses on reducing refrigerants and energy use in existing systems, preventing future performance issues through new equipment designs and transitioning to low-GWP refrigerants in new and existing systems.
As of 2019 Walmart has 1,138 electric vehicle charging stations located at more than 288 retail locations across 37 U.S. states. This infrastructure is designed to allow Walmart to provide a valuable service to our customers and contribute to reducing emissions in the communities where we operate.