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Walmart Targets Billion-Ton Reduction in Supply Chain Emissions

Mass discounter Walmart Inc. on Wednesday issued its first ever sustainability report on company-wide initiatives that address the retailer’s carbon footprint at its global supply chains and in-house efforts impacting the environmental, social and economic fronts.

A key component on the environmental front is the company’s plan to reduce emissions by 1 billion metric tons in its global supply chains by 2030.

That’s an increase of 50 million metric tons from last year’s update. The discounter on Wednesday said that is has achieved a 93 million metric ton reduction of its supplier emissions, and a 6.1 percent reduction in Scopes 1 and 2 annual greenhouse gas emissions in 2017. Walmart detailed its progress in its inaugural Environmental, Social and Governance Report, a compilation of the company’s goals, progress and achievements for fiscal 2019.

Kathleen McLaughlin, chief sustainability officer at Walmart, said that the concept behind its ESG initiatives is to “inspire collective action” to help change the sector for long-term sustainability on the environmental, social and economic fronts.

More specifically, McLaughlin said, “We’re engaged in efforts to source responsibly, create economic opportunity for retail associates and people working in supply chains, take action on climate change, and help improve sustainability of the products we sell. We believe business exists to serve society, and that when business engages to be part of the solution not only can we help accelerate progress in the world, we make our business better too.”

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The ESG report noted progress in several key areas where the retailer has activated climate change initiatives, as well as building sustainability in its supply chains.

For climate change initiatives, Walmart reported on five different areas. The company said it worked with a third-party consultant to complete a Climate Change Impact Scenario Analysis. The study was done to better understand the nature of climate change and possible implications for the retail sector. Another initiative was the further reduction in greenhouse gas emissions in 2017, versus 2015 levels. The discounter said its Project Gigaton resulted in its suppliers reporting an avoidance of more than 93 million metric tons of emissions over the last two years, with the goal of hitting the 1 billion mark by 2030.

Walmart said another goal is having its electricity needs supplied by 50 percent renewable energy by 2025, with the current rate supplied by renewable source now at 28 percent. And Walmart said for its final climate change initiative that it has diverted 81 percent of unsold products, packaging and other waste materials from landfills. That’s on top of the recycling of more than 430 million pounds of plastic film and rigid plastics globally.

On the sustainability front, Walmart’s ESG report included a discussion about the company’s perspective on respecting human rights–whether through initiatives within Walmart or through collective action–in its operations and supply chains. It also included a discussion about sourcing responsibly, which includes addressing worker safety issues in the Bangladesh ready-made garment industry. As part of the Alliance for Bangladesh Worker Safety, a five-year commitment starting in 2013 that ended on Dec. 31, 2018, Walmart said it has seen a 90 percent completion of high-priority remediation items across factories affiliated with the Alliance.

Walmart also noted that at the end of fiscal year 2019, the company achieved a supplier Sustainability Index participation rate covering 80 percent of the assortment the discounter sells in its U.S. stores and Sam’s Club locations.

But the report isn’t focused just on the corporate carbon footprint at its factories and supply chains. It also takes a look at other sustainability measures, including in-house initiatives.

Doug McMillon, chief executive officer of Walmart, noted the company’s need to add value for all stakeholders, including its employees: “Throughout Walmart’s history, we have understood that for a business to last, it must have a fundamental reason for being, which is found in the value it creates for all–customers, associates, communities, shareholders, suppliers, future generations, and the planet.”

From an in-house corporate sustainability front, Walmart said it promoted more than 215,000 people to jobs with greater responsibility and higher pay at its U.S. stores last year. It also noted that average compensation and benefits for full-time, hourly pay for store associates in the U.S. was $19.31 as of March 2019.

And the discounter said it has fostered inclusion in it workforce: 31 percent of its corporate officers are female, 44 percent of its staff with revenue responsibilities are women, and 57 percent of hourly promotions were women. Furthermore, 60 percent of those trained at its Walmart Academy were women, while 34 percent of associates with revenue responsibility are individuals who the retailer describes as “people of color.”