Walmart is aiming big when it comes to reducing greenhouse gas emissions in China. Last week the company announced that it will take out 50 million metric tons (MMT) by 2030 which is equivalent to the emissions associated with the average annual electricity consumption of 40 million Chinese households.
To do this the company is hoping to enroll all of its export and domestic suppliers in China, starting with 100 of its top suppliers, into an emissions reduction program, said. Walmart CEO Doug McMillon at a speech at Tsinghua University. The program is called Project Gigaton and expanding into China is part of Walmart’s global approach to sustainability.
“We believe that business can accelerate environmental progress while delivering economic growth," said McMillon. "That’s why we’re committed to taking a shared value approach to our work in China and around the world.”
Walmart was the first retailer to set an emissions-reduction plan approved by the Science Based Targets initiative and Project Gigaton falls under this plan, in alignment with the Paris Climate Agreement. Through Project Gigaton, Walmart aims to work with its suppliers to reduce emissions in its global value chain by one billion metric tons – a gigaton – by 2030, equal to the emissions from more than 211 million average passenger vehicles in a year. The 50 MMT emissions reduction target in China is part of this goal.
Over 400 suppliers in China, India, the U.S. and other countries have joined Project Gigaton and Walmart plans to continue to expand the program. To help provide resources to suppliers in China, Walmart has created a digital resource center in Mandarin and English with tools, case studies, and program resources on emissions reduction in the value chain: www.walmartsustainabilityhub.com.
Enhancing Energy Efficiency
China’s Project Gigaton goal builds upon Walmart’s longstanding Factory Energy Efficiency Program through which the company is working with its suppliers in China to promote energy efficiency. Walmart launched this program in 2014, with a commitment to have 70% of its China-sourced export businesses participating in the factory energy efficiency program by the end of 2017.
The company has exceeded the goal and to date, more than 800 factories have joined the program, reporting a savings of $40 million in operating expenses and emissions reduction of more than 270,000 metric tons per year. This program complements the China government’s five-year goal of reducing energy intensity by 15% by 2020.
“We are pleased with the strides Walmart is making in efficiency initiatives while growing and investing in its business in China,” said Dr. Zhang Jianyu, China representative, VP Environmental Defense Fund, China. “Their collaboration and innovation within the industry is paving the way for others to do business responsibly in the country.”
Investing in Sustainable Operations
McMillon revealed Walmart’s new commitment to reduce the carbon intensity (on a per revenue basis) of Walmart’s own operations in China, which include stores, clubs, distribution centers and other facilities, by an additional 25% by 2025, 70% below 2005 levels. This is part of a global goal to reduce emissions in company operations 18% by 2025. The company plans to accomplish this goal through continued innovation in operational efficiency and sourcing clean renewable energy, such as wind and solar, reducing our emissions impact while continuing to expand our business in China. In 2018 alone, Walmart will open 30 to 40 new stores, including five Sam’s Clubs and a new supermarket format.
These new commitments in China are an extension of sustainability efforts Walmart has already started in the country. For example, the company recently completed 1,400 retrofit projects to transform its existing facilities to reduce emissions and create a better shopping experience for customers. The projects included converting lighting to energy-efficient LEDs, upgrading HVAC systems, and improving refrigeration fixtures to protect food quality and save energy. These efforts, along with other operational improvements, cut emissions by more than half on a per sales dollar basis over the last decade.
As a complement to the Chinese government’s goals to dramatically increase usage of renewable energy, Walmart plans to expand on-site solar systems and work with developers to bring new large-scale off-site projects onto the grid. The company plans to support renewable energy access by working with government, industry peers, suppliers and development partners. Walmart will also be participating in the Chinese government’s Green Building Program for Hypermarkets in the coming year.
Additionally, Walmart is working with the government in China to develop new Green Packaging Standards for the logistics industry in China and is committed to working with suppliers and organizations to reduce materials waste and support recycling in our value chain through Project Gigaton. By sharing best practices in developing sustainable packaging, the company aims to help promote “green consumption,” a priority for the China government this year.