Originally published at corporate.walmart.com. Walmart ranked No. 22 on The DiversityInc Top 50 Companies for Diversity list in 2021.
Walmart has made a major milestone: We are now more than halfway toward our goal to reduce or avoid 1 billion metric tons (a gigaton) of greenhouse gas (GHG) emissions from product supply chains by 2030 through our Project Gigaton initiative. With over 4,500 of our suppliers engaged since the initiative’s launch in 2017, and suppliers reporting a cumulative total of more than 574 million metric tons of emissions reduced or avoided, Project Gigaton continues to make progress as one of the largest private sector consortia of its kind.
Driving Action on Supply Chain Emissions
Most greenhouse gas emissions in the retail sector lie in product supply chains and are classified as Scope 3 emissions, as opposed to Scope 1 emissions, which are the direct result of a company’s operations — such as the emissions from refrigeration, onsite fuels and transportation — or Scope 2 emissions, which are the indirect result of purchased energy, such as electricity. We designed Project Gigaton in 2017 to catalyze and support supplier initiatives to decarbonize product supply chains.
Over the years, we have expanded Project Gigaton to focus action on six arenas in product supply chains that are key for emissions reduction and also tend to align with suppliers’ business priorities: energy use, nature, waste, packaging, transportation and product design.
For each of these areas, we provide calculators that describe potential changes in business practices and translate them into emissions impact based on guidance from authoritative bodies such as CDP and leading NGOs like the World Wildlife Fund (WWF) and the Environmental Defense Fund (EDF).
In 2021, more than 2,500 global suppliers reported their initiatives and resulting changes in emissions through Project Gigaton. Suppliers reporting through Project Gigaton in 2021 represented more than 70% of U.S. product net sales.
Project Gigaton also provides suppliers with resources to support innovative solutions. For example:
- In 2020, we launched Gigaton PPA, a collaboration with Schneider Electric to help eligible suppliers access renewable energy, learn about energy purchases, reduce emissions and contribute toward Project Gigaton. The first Gigaton PPA supplier cohort formed in 2021 and the project is progressing through the development process.
- In 2021, we expanded a supplier financing program we developed in 2019 with HSBC to offer enhanced financing and early invoice payments to Walmart private brand suppliers who set science-based emissions targets in line with the 1.5 Celsius degree pathway as reported to CDP.
Through such encouragement and support, we aim to democratize climate action — helping small, medium and large suppliers alike take action to reduce their emissions.
Measuring and Addressing Scope 3 Emissions
In a business as complex as multicategory retail, Scope 3 emissions are notoriously difficult to measure. Data does not exist to calculate a comprehensive and accurate Scope 3 emissions footprint; such a calculation would involve detailed information about multiple variables at every stage of the production, transportation and consumption of millions of items. The emissions footprint of a single t-shirt, for example, depends on the agricultural practices in the cotton field that produced the yarn, the energy used in the mill that spun the fabric and the garment factory that sewed it, the fuel sources and efficiency of the trucks at each stage of transportation, and the choices a customer made regarding how to wash and dry the item.
While it may be difficult to measure a multi-category retailer’s total Scope 3 footprint precisely, we designed Project Gigaton to drive action to decarbonize supply chains, focusing on concrete changes to specific business practices and consumer behaviors suppliers can measure or at least estimate, using the best available science/guidance from our NGO partners EDF, CDP and WWF. And by aiming for a gigaton by 2030, we set a bold ambition in line with the Paris Agreement, based on the broad estimates of Scope 3 emissions when we set the goal.
In parallel with Project Gigaton, we continue to work on refining our estimates of our Scope 3 emissions footprint based on the latest available methodologies. Our most recent submission to CDP relies on Method 1 of the GHG protocol. For the retail sector, purchased goods and services and use of sold products are the largest estimated sources of Scope 3 emissions — and for 2020, we reported to CDP that Walmart U.S. had a combined estimate of 162.4MMT CO2e for those two categories of emissions. This data allows us to prioritize our areas of focus while we engage NGOs and other experts on further improving methodologies based on data availability and quality.
Cross Industry Advocacy and Action
In coming months, we expect to revise our Scope 3 targets in collaboration with NGOs, suppliers and other stakeholders. In addition to pursuing our own mitigation initiatives, we also continue to engage policymakers, NGOs, customers, associates and other retailers through direct advocacy, industry engagement campaigns such as the Retail Race to Zero and trade associations.
There is still much more to do. Individually and collectively, we can all accelerate our own climate action and advocate for consistent and robust national and international policies that align with the Paris Agreement.
Stay tuned as we publish additional environmental, social and governance (ESG) briefs throughout the year covering progress on our key initiatives. For more on our climate efforts, see Walmart’s FY22 climate brief.