Walmart Sustainability Report: Supplier Scorecards to Launch in 100 Categories this Year
Walmart expects to develop supplier scorecards in up to 100 major product categories by the end of this year, in the latest stage of development for its Sustainability Index, according to the company’s 2012 Global Responsibility Report.
The move follows efforts last year to integrate the index into Walmart’s business. In January 2011 it piloted detailed assessments in six product categories and used these to create category scorecards, which allow its buyers to evaluate supplier performance against the biggest issues and opportunities across their products’ life cycles. The company says it is developing incentives to recognize buyers and suppliers who are performing well.
Walmart first announced its Sustainability Index, a wide-reaching effort to assess and improve the sustainability of its products, in July 2009. The company developed the research and metrics behind the index with help from The Sustainability Consortium and its more than 90 members, including suppliers, academics, NGOs and other retailers.
In March the nonprofit Institute for Local Self-Reliance criticized the company for what it called “little progress” towards development of the sustainability index.
In Walmart’s report - level-checked at GRI application level B – the company also detailed progress against its commitment to help suppliers improve energy efficiency at 200 Chinese factories by the end of 2012. At the end of 2011, 148 factories had achieved a 20 percent reduction in energy consumption per unit of production or revenue, and 313 were making energy efficiency improvements to their facilities, ranging from minor upgrades to major systems improvements.
The company is aiming to eliminate 20 million metric tons of GHG emissions from its global supply chain by the end of 2015, though to date it has only cut about 120,000 metric tons. It says, however, that it has identified projects with the potential to cut another 16 million metric tons. Examples range from a collaboration with a supplier to adjust freezer temperatures for specific cold chain products, to a focus on sustainable palm oil and beef production.
Walmart says its suppliers have saved more than one billion gallons of water over the past two years at U.S. poultry facilities, through recycling water, using low-flow nozzles and other measures. But the company did not give overall water use or consumption figures.
In 2011, Walmart kept 80.9 percent of waste from its U.S. operations out of landfills, and its waste-reduction efforts returned more than $231 million to the business last year through a combination of increased recycling revenue and decreased expenses. Its stores in China and Brazil diverted 52 percent of operational waste from landfills, and its U.K. chain ASDA now sends zero food waste to landfills.
The company says it is on track to meet its goals of eliminating landfill waste from U.S. stores and Sam’s Club locations by 2025, but says “there is no easy answer” for the 19.1 percent of its waste that currently goes to landfill, most of it from its restrooms and parking lots. Managing this waste may require new technology and partnerships, the company says.
Walmart cut its plastic shopping bag waste about 3.1 billion bags in 2011, a 35 percent reduction from a 2007 baseline, beating its goal of a 33 percent cut by 2013. It says it is establishing a 2009 baseline that will allow it to reduce food waste in emerging market stores and clubs by 15 percent, and in other markets by 10 percent, by the end of 2015.
Over the past year, Walmart increased the dollar value of locally grown produce it sells – defined as items grown in-state – by 97 percent. In-state sales now account for over 10 percent of all produce sold in its U.S. stores. Walmart has a goal to double the amount of locally grown produce it sells in the U.S. by the end of 2015, from a 2009 baseline.
Last year the company became the second-largest onsite power generator in the U.S., for its Texas and California stores alone. As of 2010, its buildings worldwide got about four percent of electricity from Walmart-driven renewable projects, and bought another 18 percent from renewable projects on the grid, for a total of 22 percent renewable electricity.
In total Walmart has 180 renewable energy projects in operation or under development. Last week, it announced six solar projects totaling 2 MW on stores in Colorado, taking the company to 100 solar power projects in the U.S., and it now has 115 rooftop solar installations in seven countries.
The new Colorado solar arrays, SolarCity projects, are in the metropolitan Denver area. When complete, Walmart’s SolarCity projects in Colorado are expected to generate nearly 3 million kWh of renewable energy per year. The solar projects should avoid producing more than 5 million pounds of carbon dioxide emissions per year, Walmart says.
SolarCity had to design a customized system to meet the requirements of large, flat rooftop-solar systems operating in the extremes of the Rocky Mountain climate. The solar company will install, own and maintain the six systems, Walmart says.
In September 2011, Walmart and SolarCity announced plans to install solar panels on up to 60 additional stores in California, expanding Walmart’s solar portfolio to more than 75 percent of its stores in the state. When completed, the planned projects will bring Walmart’s total number of solar installations in California to 130. Each array will provide 20 to 30 percent of the store’s electric needs and generate up to 70 million kWh of renewable energy per year, the company said.
Walmart currently draws 4 percent of its electricity needs from onsite renewable energy sources and an additional 18 percent is green power purchased from the grid, according to an article in The New York Times.
Other renewable energy projects at big-box retailers in Colorado include a geothermal heat pump installed at an IKEA store near Denver. The pump was installed at the Centennial, Colo., store in conjunction with the National Renewable Energy Laboratory. NREL is based in Denver suburb Golden, Colo. It is the first IKEA store in the United States to be built with geothermal heating and cooling.
The company also has 26 fuel cell installations, and five utility-scale offsite wind projects in operation or under development in Mexico, the U.S. and the U.K. It says it is testing projects and methods that include solar, fuel cells, microwind, offsite wind projects and green power purchases.
Although Walmart reports many metrics through 2011, it says 2010 is the last available data year for its CO2 measurements. In that year, the company’s CO2e emissions rose 4.7 percent, from 21 million to 22 million tons, and its emissions per million dollars in sales fell 1.9 percent, from 53 to 52 tons (see charts).
The company says those results are stronger in the light of changes to currency exchange rates. In fiscal years 2009 and 2010, it experienced $2.3 billion and $9.8 billion, respectively, in unfavorable currency exchange rate impacts.
Walmart is targeting a 20 percent cut in GHG emissions from its 2005 base of existing stores, clubs and distribution centers, by the end of 2012. In that fleet of buildings, it saw GHG emissions fall 12.7 percent from 2005 to 2010 – a further reduction from the 10.6 percent drop it reported for 2005-2009.
Walmart’s total GHG footprint, including new facility growth and transportation emissions, has grown by about 13.8 percent since 2005, while sales rose by 35.6 percent and square footage by 33.1 percent.
Factors contributing to this efficiency improvement include technological advances in energy efficiency, reductions in refrigerants, and renewable energy projects. In 2011, the company says it achieved almost 69 percent improvement in fleet efficiency over its 2005 baseline.
But Walmart says it expects further reductions to be increasingly challenging, since it has already implemented many of the projects with the highest efficiency gains at the lowest cost.
Refrigeration accounts for about 11 percent of Walmart’s GHG emissions. The company says that in 2011, it became one of the first U.S. retailers to use a secondary loop system to reduce the carbon footprint of its refrigeration. All of its international markets are in the process of eliminating open freezer cases, except for Canada and the U.K., where testing continues.
In 2011 Walmart missed a goal of doubling U.S. sales of products that help make homes more efficient, by a 2008 baseline, increasing sales by 33.5 percent. It also missed a goal of cutting phosphates in laundry and dish detergents in the Americas region by 70 percent by a 2009 baseline, with a 43 percent reduction, although its retail operations in Argentina and Brazil surpassed the 70 percent reduction goal.
The company says it is making progress against a goal of cutting packaging by five percent globally by 2013, against a 2008 baseline.
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