Wal-Mart's Green Mandate to Suppliers

New York Times (Rosenbloom) - Wal-Mart, the nation’s largest retailer, announced on Thursday that it would cut some 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015 — the equivalent of removing more than 3.8 million cars from the road for a year. The company plans to achieve that goal by focusing on popular product categories with the highest embedded carbon — milk, bread, meat, clothing — and by pressing its suppliers to rethink how they source, manufacture, package and transport those goods. Essentially, suppliers are being asked to examine the carbon lifecycle of their products, from the raw materials used in manufacturing all the way through to the recycling phase.

Wal-Mart’s sustainability executives will work with suppliers to help them figure out what measures to take. Any costs related to making products more energy-efficient — redesigning packaging or using a different fertilizer — will be the responsibility of each supplier, not of Wal-Mart. Jim Stanway, who oversees Wal-Mart’s supplier initiatives involving energy, said in an interview on Thursday that suppliers would be willing to spend money if “it’s an investment where everybody’s sure it makes the supplier more profitable.”

IndustryWeek - The program to reduce GHGs has three main components:

• Selection -- Walmart will focus on the product categories with the highest embedded carbon. This is defined as the amount of life cycle GHG emissions per unit multiplied by the amount the company sells. To find the embedded carbon, the ASC reviewed the GHG emissions associated with all Walmart product categories. This approach ensures the project team focuses on the categories that have the greatest opportunity for reductions. Reductions can come from any part of a product's life cycle.
• Action -- For a project to be included as part of this goal, it must reduce GHGs from a product in either the sourcing of raw materials, manufacturing, transportation, customer use or end-of-life disposal. Walmart must demonstrate it had direct influence on the reduction and show how that reduction would not have occurred without Walmart's participation.
• Assessment -- Suppliers and Walmart will jointly account for the reductions. ClearCarbon will perform a quality assurance review of those claims to ensure methodology, completeness and calculations are correct. When the claims meet the quality assurance check, PricewaterhouseCoopers will assess under consulting standards whether the defined procedures were followed consistently to quantify the reduction claim.

Walmart collaborated with Environmental Defense Fund (EDF) to develop this approach that looks at the supply chain on a global scale. Other external advisers include PricewaterhouseCoopers, ClearCarbon Inc., the Carbon Disclosure Project and the Applied Sustainability Center (ASC) at the University of Arkansas. This team will identify projects, quantify reductions, engage suppliers and ensure proper procedures are followed for each GHG reduction claim.