The company said on Thursday that it aims to enroll all of its export and domestic suppliers in China, starting with 100 of its top suppliers, into an emissions reduction program in an effort to reduce greenhouse gas emissions in its China value chain by 50 million metric tons.
Walmart president and CEO Doug McMillon announced the launch of the expansion of its Project Gigaton program in a speech at Tsinghua University in Beijing.
“As a global company, we are proud to use our reach to help create a more sustainable future, for our customers, associates and the communities we serve,” McMillon said. “We believe that business can accelerate environmental progress while delivering economic growth. That’s why we’re committed to taking a shared value approach to our work in China and around the world.”
Expanding its ongoing “Project Gigaton” is part of Walmart’s global approach to sustainability, in which China plays an important role. 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, the retailer noted.
Through Project Gigaton, Walmart aims to work with its suppliers to reduce emissions in its global value chain by 1 billion metric tons–a gigaton–by 2030, equal to the emissions from more than 211 million average passenger vehicles in a year. The 50 million metric ton emissions reduction target in China, which the company equivocates to the emissions associated with the average annual electricity consumption of 40 million Chinese households, is part of this goal.
“Walmart has a rich history of collaboration with key stakeholders in China and we’re excited to bring our latest sustainability initiative, Project Gigaton, to China,” Wern-Yuen Tan, president and CEO of Walmart China, said. “Integrating more sustainable practices into our operations, resource management and sourcing efforts can spur technological innovation, inspire brand loyalty and increase associate engagement.”
More than 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 at walmartsustainabilityhub.com, with tools, case studies and program resources on emissions reduction in the value chain.
The project builds upon Walmart’s longstanding Factory Energy Efficiency Program in 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 percent of its China-sourced export businesses participating in the program by the end of 2017.
The company has exceeded that goal and so far 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 annually. This program complements the China government’s five-year goal of reducing energy intensity by 15 percent by 2020.
This fall, China had shut down 80,000 factories, including some textile dyeing facilities, in a multi-month crackdown on pollution in an effort to improve the country’s poor air quality.
As a complement to the Chinese government’s goals to dramatically increase usage of renewable energy, Walmart said it plans to expand on-site solar systems and work with developers to bring 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.
Walmart is also working with the Chinese government to develop new Green Packaging Standards for the logistics industry and is committed to working with suppliers and organizations to reduce materials waste and support recycling.
McMillon revealed Walmart’s new commitment to reduce the carbon intensity of Walmart’s own operations in China, which include stores, clubs, distribution centers and other facilities, by an additional 25 percent by 2025, which would be 70 percent below 2005 levels. The company plans to accomplish this through innovation in operational efficiency and sourcing clean renewable energy, such as wind and solar, reducing its emissions impact while continuing to expand its business in China. In 2018, Walmart plans to open 30 to 40 new stores, including five Sam’s Clubs and a new supermarket format.
The company recently completed 1,400 retrofit projects to transform existing facilities to reduce emissions and create a better shopping experience for customers.