Inside Walmart’s Lofty Project Gigaton: Supply Chain Engagement for Cutting Emissions

 

Consumer spending drives many of the world’s economies, but not without a huge environmental cost. The global production and use of consumer products – from supplier to retailer to consumer – now accounts for 60 percent of all greenhouse gas emissions and by 2025 will generate 2.2 billion tons of municipal solid waste per year according to estimates from The Sustainability Consortium.

The world’s largest retailer, Walmart, is hoping to reverse these trends. At its April 2017 Sustainability Milestone Summit, the retailer launched Project Gigaton, a challenge to its direct Tier 1 suppliers to collectively cut one gigaton (1 billion metric tons) of greenhouse gas emissions from their operations by 2030.

Most of Walmart’s emissions are produced by its supply chain (so-called indirect or Scope 3 emissions), so this target is significant. It’s also ambitious considering one gigaton falls somewhere between the annual emissions of Japan and Germany.

It also represents a considerable challenge for Walmart. The company has worked on several green initiatives with its suppliers since it began its own sustainability journey in 2005. But for the most part, Walmart has no direct control over these companies or full visibility into their operations.

So, to meet the Project Gigaton challenge, the company has focused its engagement with suppliers in three key areas – collaboration, communications, and recognition – said Felicia McCranie, Senior Manager, Corporate Communications at Walmart in a recent telephone interview.

To begin, the company teamed with several NGOs, including the World Wildlife Fund and Environmental Defense Fund, to help design and manage the program and to work directly with its suppliers to help them identify key areas of impact and set targets.

Walmart and its NGO partners have also created an online resource center and toolkit. Here, suppliers can join the program, commit to reduction targets, share solutions and lessons learned, access educational resources, and view webinars on a range of topics.

Through all the Project Gigaton communications, the messaging approach is much more “carrot” than “stick,” according to McCranie, by communicating the business value that Walmart has experienced through these types of reduction programs.

“So, part of the work is helping some suppliers get started on the journey, and for others it’s to encourage them to set ambitious goals because we’ve learned that setting big goals drives innovation. We try to create a safe place to say, ‘hey there is no punishment if you don’t reach your targets, but how do we help you reach your goals or aim a little higher and achieve more than you thought you could’.”

To make the information more accessible, the resources in the toolkit are further subdivided into six key areas of impact, or pillars: Energy, Waste, Packaging, Agriculture, Deforestation, and Product Use.

“We are not proposing a one-size-fits-all solution. Suppliers can focus on those areas where they can have the greatest impact and drive the biggest change. The program is designed so that anywhere they are, they can step into it,” said McCranie.

Participants get to meet in regular “best practice” summits where they can collaborate with others within the various pillars and showcase their successes. And all participants are asked to report their achievements each fall using an online survey tool developed by The Sustainability Consortium. This allows the Project Gigaton team to monitor progress and aggregate the results across all suppliers.

Recognition is also a big part of Project Gigaton. Supplier stories and case studies are shared within Walmart, through various social media channels, and at speaking events like the recent GreenBiz 18 event and the Climate Week summit in New York.

“We look for opportunities at events like this to highlight success stories of our suppliers and amplify their work,” said McCranie.

Since the initial launch in April 2017, the project has expanded to areas outside the US. Walmart officially launched Project Gigaton in the UK in January 2018 and in China in March 2018. For the China launch, the company created a Mandarin version of the toolkit. As the effort expands internationally, other languages will be added, according to McCranie.

So, what’s happened over the past year since the launch? At this year’s Sustainability Milestone Summit held April 18, Walmart announced that more than 400 suppliers with operations in more than 30 countries have joined the program. Together suppliers are reporting emissions reductions of more than 20 million metric tons so far.

About 85 percent of these reductions have come from the Energy and Product Use pillars, with projects in areas like renewable energy investments and the development of more efficient products.

For example, Procter & Gamble committed to cut 50 million metric tons of emissions from its operations, both direct and indirect. Part of that will come from a campaign to encourage its Tide detergent customers to wash in cold water, thereby cutting emissions per load an estimated 40 percent.

Walmart has also just added a special recognition section to the Project Gigaton website, that highlights “Giga-Gurus,” which are companies that have set specific, measurable goals and have agreed to share their stories publicly.

Reducing 20 million metric tons from the supply chain is a good start, and it shows that the project is gaining traction among suppliers, but there’s a lot more to do to reach the 1 gigaton goal by 2030. Want to stay in touch with Project Gigaton? You can follow #ProjectGigaton on social media, view the Giga-Guru case studies posted on the website, and replay the proceedings from the April 18 event on Walmart’s YouTube channel.

Photo: Walmart