Walmart Hits Gas In Going Greener

Thin film solar panels on a Walmart store in Mountain View, California. | (Photo provided)

After a decade of success in its sweeping sustainability efforts, Walmart Inc. is working on a new goal: slashing greenhouse gas production in its supply chain.

The Bentonville retailer launched Project Gigaton last year, inviting “suppliers to join us in a commitment to reduce emissions from our collective value chains by 1 billion tons — a gigaton — by 2030,” spokesman Micah Ragland said in an email to Arkansas Business.

“Achieving this ambitious goal would be the equivalent of removing 211 million passenger vehicles from the road for a year.”

Ragland said 90 percent of Walmart’s total greenhouse gas emissions comes from its supply chain. Suppliers are expected to work on energy, agriculture, waste, packaging and deforestation issues.

“Every supplier can participate, no matter what type of product they sell,” he said.

Walmart, which is notorious for pushing suppliers to drive down costs, has been trying to clean up the environment for more than a decade. In 2005, then-CEO Lee Scott announced the company’s aggressive environmental goals: to be supplied 100 percent by renewable energy, to create zero waste and to sell products that sustain people and the environment.

Since then, Walmart has hit a number of its environmental targets. Walmart doesn’t have an exact cumulative amount for the money it has saved, but it estimates it in the hundreds of millions of dollars. Some highlights include:

• Nearly 20 percent of Walmart’s U.S. stores and about 28 percent of its global locations now are powered by renewable energy. Its goal is to have 50 percent of its global operations to powered from renewable energy by 2025.
• Walmart ranks second in the country in sites with solar installations. And since 2012, Walmart has ranked first or second among U.S. corporate solar energy users.
• By the end of 2017, Walmart said 81 percent of unsold products, packaging and other trash was kept out of the landfills from its U.S. locations and 78 percent around the world.

“They’ve definitely been a significant, if not the most significant, influencer of sustainability in the consumer products industry,” said William Paddock, managing partner at the consulting firm WAP Sustainability of Chattanooga, Tennessee.

Project Gigaton “signifies how significant and how successful Walmart thinks their influence can be,” he said.

But some fear Walmart’s mandates will be a financial strain on suppliers.

While the suppliers may save money in the long run by being more efficient or using less energy, “in the meantime, they may actually have a higher average cost structure,” said Katrijn Gielens, an associate professor of marketing at the University of North Carolina. “Most retailers are not willing to accept higher buying prices, which means [suppliers’] margins are going down. And it puts a lot of strain on them.”

Still, the World Wildlife Federation of Washington, which is working with Walmart on Project Gigaton, praised the retailer’s environmental moves and thinks they will pay off for in efficiency for suppliers.

More consumers are seeking out sustainable products as well, said Judith Hochhauser Schneider, director of private sector engagement for the WWF.

“Consumers want to know that their supply chain is as sustainable as possible,” she said. “They don’t want to buy a can of Coca Cola or toilet paper off the shelf and think that that has led to deforestation. They want to know that it’s a clean supply chain.”

Other Goals
Next year, Walmart plans to add to the several hundred electric vehicle charging stations now on its parking lots in 36 states, spokesman Ragland said. “This expansion will bring Walmart’s total number of chargers to well over 1,000 when complete, making Walmart one of the nation’s leading EV charging stations hosts,” he said.

In 2019, Walmart also plans to double the amount of renewable energy it uses at its U.S. locations and increase the percentage at its global stores. “The new initiatives include expansion of on-site solar energy installments,” Ragland said.

Walmart will add 130 sites, bringing its total to about 500 locations in 22 states and Puerto Rico, which would pass its goal, set in 2014, to double solar use by 2020.

Walmart’s focus on the environment can be traced to the 21st Century Leadership speech given by Walmart’s Scott in October 2005.

“People expect a lot of us, and they have a right to,” Scott said, referencing Walmart’s widely praised humanitarian response to Hurricane Katrina, two months earlier. “Due to our size and scope, we are uniquely positioned to have great success and impact in the world, perhaps like no company before us.”

Scott announced the company’s goals for renewable energy, creating zero waste and selling sustainable products.

“The environment is begging for [Every Day Low Costs] … for the Walmart business model,” he said. “And if we do that, everyone will benefit.”

One of Walmart’s successes came on its trucking side, where it was able to essentially double its trucking efficiency, said Andrew Spicer, associate professor of international business at the University of South Carolina, who has studied Walmart’s sustainability efforts.

Walmart has one the largest private fleets in the country. Changes in product packaging helped Walmart meet trucking efficiency goals, according to a 2014 report by David Hyatt, a professor of supply chain management at the Sam M. Walton College of Business at the University of Arkansas. In 2008, Walmart said it would sell only concentrated liquid laundry detergent, which requires only one-third of the diesel to ship as regular liquid detergent.

Another savings came from a change in the packing of infant car seats. Instead of shipping them in boxes, the car seats were packaged in thick plastic covers, resulting in a savings in both shipping and fuel costs, Hyatt wrote.

Walmart achieved its goal of doubling fuel efficiency and saving nearly $1 billion in 2015, according to its 2018 Global Responsibility Summary. Walmart also avoided emissions of almost 650,000 metric tons of carbon dioxide in 2015 compared to 2005.

Spicer, the USC professor, said Walmart’s operational goals efforts have been quite successful.

“And of course that fit very much into their business model,” he said. “They would save costs and sort of help the environment as well.”

Walmart Energy Savings

In 2005, Walmart Inc. of Bentonville announced its ambitious environmental goals to be supplied 100 percent by renewable energy, to create zero waste and to sell products that sustain resources and the environment.

Here are a few of the retailer’s successful projects and what the savings have been, according to spokesman Micah Ragland:

LED Fixture Initiative
Walmart has installed more than 1.5 million LED (light emitting diode) fixtures across more than 6,000 of its stores, parking lots, distribution centers and corporate offices in 10 countries. This has reduced Walmart’s lighting energy consumption and lowered its lighting costs by hundreds of millions of dollars over the past decade.

Reducing Material Waste
Walmart looks for ways to eliminate excess material in its fixtures, products and materials in its buildings. In 2017, it refurbished 280,000 tons of decks, shelves, uprights and other store fixtures in the United States. It helped the retailer prevent 14,944 kilowatt-hours of electricity consumption and nearly 5 million pounds of material to produce new fixtures.

Reducing Food Waste
The primary way Walmart reduces food waste is by selling the food it carries. In Canada, China, Japan, the United Kingdom and United States, Walmart offers customers discounts on food that is close to its sell-by date, including meat, bakery, dry goods and dairy products. During the fiscal year that ended in January, Walmart sold more than 262 million units through these discounts in the United States.

Rooftop Heating & Cooling Units
By the end of 2015, Walmart had upgraded nearly 6,000 rooftop heating and cooling units, the highest number of such high-efficiency installations in the country. That resulted in an estimated savings of 50 million kilowatt hours and 35 million pounds of carbon dioxide equivalent. The U.S. Department of Energy said that measure is worth as much as $5 million annually.