BUSINESS:

Wal-Mart vows to slash carbon from supply chain

Wal-Mart Stores Inc. will attempt to slash 20 million metric tons of greenhouse gas emissions from its global supply chain by the end of 2015.

The emissions figure represents one-and-a-half times the company's projected carbon footprint growth during the next five years, said CEO Mike Duke, who announced the goal today at Wal-Mart's headquarters in Bentonville, Ark.

"Reducing [emissions] in the life cycle of our products will often mean reducing energy use," Duke said. "That will mean greater efficiency ... and lower costs, making our business stronger and more competitive."

The world's largest retailer (NYSE: WMT) is working with the Environmental Defense Fund and other organizations to help its more than 100,000 global suppliers identify and quantify ways they can cut emissions of carbon dioxide and other greenhouse gases. Ultimately, Wal-Mart wants the suppliers to measure the entire environmental impact of their products and make those data available to shoppers at the retailer's more than 1,400 stores around the world (Greenwire, July 16, 2009).

Wal-Mart has already asked its top-tier suppliers to answer 15 uniform questions regarding greenhouse gas emissions, solid waste production, water consumption and production ethics, said Matt Kistler, the company's vice president for sustainability. He estimated that it will be at least five years before products on Wal-Mart shelves and racks include tags with environmental data, akin to nutritional labels on food.

Wal-Mart must first measure its supply chain's carbon footprint -- something no company has attempted on such a scale, said Elizabeth Sturcken, who manages Environmental Defense Fund's corporate partnerships program.

"The real importance is the change of perspective this brings," she added. "It's like changing to using a microscope from using a satellite to find carbon reductions."

Wal-Mart will focus initially on product categories with the highest "embedded carbon," a term that reflects the amount of life-cycle emissions per unit multiplied by the volume the company sells. Those product categories include apparel, fresh products such as dairy, and compact fluorescent lights, according to a Wal-Mart spokeswoman. Wal-Mart will then work with suppliers to decarbonize how they source raw materials, as well as make, transport and dispose of products.

ClearCarbon Inc., PricewaterhouseCoopers and other Wal-Mart advisers will verify the suppliers' emissions reduction claims and ensure proper procedures were followed.

Wal-Mart CEO Duke said his company will be able to pass energy cost-savings on to customers in the form of lower prices.

"We will be efficient," he vowed, "because we can find the reductions anywhere in the world and at the lowest price."

Duke said his company is striving to one day use only renewable energy and generate zero waste. Wal-Mart is integrating alternative-fuel vehicles into its fleet, cutting plastic bag waste and buying renewable electricity (Greenwire, Feb. 2, 2009).

The company recently installed 400 kilowatt-hour servers -- which can run on a range of fuels, including natural gas, biogas and sunshine -- at two stores in Southern California (Greenwire, Feb. 24).