The Financial Times reported that the retailer has announced an initiative to eliminate 20 million metric tons of CO2 emissions from its supply chain over the next 5 years. All but 10% of the reductions will come from Walmart suppliers rather than direct Walmart operations. The article stated that:
Mike Duke, chief executive repeated Walmart’s view that its efforts would ultimately lower prices for its customers, chiefly through resulting savings in energy use.
The company is in the process of developing GHG emissions/reduction quantification standards. What remains to be seen is the extent to which the methodology will align with existing – and regulatory – calculation standards.
Clearly, suppliers will be expected to pass emissions-related cost savings on to Walmart, while concurrently addressing the additional administrative requirements related to the sustainability/emissions reduction programs. The company has stated that vendor sustainability will become incorporated into its buying decisions.
As we mentioned in an earlier post, some suppliers may choose not to take on the additional efforts and costs associated with implementing Walmart’ sustainability and CO2 emissions requirements. But before making such a decision, suppliers should conduct a thorough assessment of it environmental profile to identify where the opportunities and risks lie. This information will assist in making more informed decisions, especially in the context of being a supplier to the largest retailer in the world.