Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user
You will be redirected back to your article in seconds

Walmart, Lenzing and The Carbon Trust on Chasing ‘Net Zero’

While sustainability is no longer a siloed concern, the industry has yet to make it a true priority when weighing important business decisions. Sign up for our webinar "Viewing Sustainability Like an Investor: Weighing Progress and Profit" on Nov 22 to learn key metrics to keep consumers, your company and Wall Street happy.

When it comes to mitigating climate change, the best group efforts should add up to zero.

At April’s Fairchild Media Group Virtual Sustainability Summit, the “Net Zero Goals and Gains” panel viewed greenhouse gas mitigation through the lens of brand actions, cross-competitor partnerships, governmental benchmarks, and collaboration with upstream suppliers and downstream users as the only way to achieve net zero goals.

Speakers on the panel, moderated by Sourcing Journal’s sourcing & labor editor Jasmin Malik Chua, included Pauline Op de Beeck, client manager & fashion sector lead, The Carbon Trust; Gerson Fajardo, director, sustainability, quality operations & benchmarking, Walmart; and Robert van de Kerkhof, chief commercial officer, Lenzing AG.

Nothing can be achieved without first understanding the distinct definitions, which are often mistakenly used interchangeably. Carbon neutral, governed by standards, means a company has neutralized its carbon footprint. Climate positive isn’t internationally regulated, but means that purchased offsets surpass emissions for a net-positive result. Net zero refers to science-based targets, specifically the Paris Agreement, where the Intergovernmental Panel on Climate Change urged countries to reduce CO2 emissions to a “net zero” level by 2050 to keep global warming from surpassing a 1.5°C increase of pre-industrial levels.

A company’s emissions are identified in three scopes—the first two focusing on an organization’s own, thus controllable, operations. The third adds in upstream emissions associated with garment manufacturing as well as all downstream emissions associated with customer use and product end of life.

“When we’re talking about net zero, we’re really talking about the whole deal,” said The Carbon Trust’s Op de Beeck. “It’s an aggressive decarbonization pathway for scopes 1, 2 and 3, so it’s your own operations and your value chain, plus decarbonizing along the 1.5 degree trajectory for all three scopes based on science-based targets.”

There are various methods of greenhouse gas mitigation, from avoidance to reduction to offsets, and companies must look at each.

“The first aim is to reduce, and as a company we need to look at what can be done and take responsibility, specifically on scope 1,” said Lenzing’s van de Kerkhof. “Short term, we must replace all our internal energy sources. Mid- to longer-term, we need to think about processes and product line changes. Longer term, we have an ambitious target of reducing emissions by 50 percent in 2030, but to go to zero, that really requires innovation and collaboration. Considering there are so many unknowns, we need to work with certified organizations to offset what we’re doing today. Over time, I expect we’ll need to increase our offsets since the downstream demand will come faster than we can implement the improvements.”

Collaboration is key

While many corporate commitments cover areas under their control, most missives take aim at the supply chain that is the least visible, and most in need of collaboration. Walmart has set a strong example through its Project Gigaton, which aims to avoid 1 billion metric tons of greenhouse gases from the global value chain by 2030.

“Since we started Project Gigaton in 2017, we have avoided 375 million metric tons of greenhouse gas emissions,” said Walmart’s Gerson Fajardo, who praises its broad group effort. “Of course, we couldn’t do that alone, and we’ve had 3,100 suppliers join the program.”

Walmart has also seen progress because it helps suppliers set goals. “Using the tools we’ve provided, suppliers can report their greenhouse gas emissions—not just to us but to other organizations and to use in their ESD [Effort Sharing Decision] reports,” he said.

Walmart also organizes summits, meetings and workshops, teaching its suppliers how to measure visibility and transparency. “There’s huge engagement when we do these events,” said Fajardo. “In the apparel and textile sector, we require all our suppliers to have their fabric mills and processing facilities report into the Higg Index every year, and post verified scores every other year. And with that we have a lot of greenhouse gas emissions visibility, and that drives change and improvement.”

Walmart learned early in its sustainability journey to partner with local governments, NGOs, industry organizations and its own suppliers to make this happen.

Leader or laggard?

Companies are also finding that while emissions mitigation initiatives can be costly, getting financing isn’t always a problem, especially if they can prove and lead with a long-term cost, social and reputational benefit.

“It’s much more a philosophical question,” says Lenzing’s van de Kerkhof. “You need to ask, ‘What kind of role do you want to play in the industry? Do you want to be a leader or a laggard? Of course, [management boards] expect a certain return on that investment, which needs to come through premiumization, but I believe that as the industry moves more towards science-based targets, it’s going to look for carbon-neutral raw materials. It’s actually helped us attract money. We’re building a plant in Brazil, and we had to borrow over a billion dollars for that project, led by IFC and IDB Bank, who are extremely picky on our sustainability targets and requirements.” The key is for companies to set specific targets and show annual results against those targets.

Government, industry and trade organizations must also collaborate on partnerships and on regulation to level the playing field and bring the laggards up to speed.

“It’s clear from using the EU as an example, that the textile economy is one area they will legislate in the short term,” said The Carbon Trust’s Op de Beeck. “Looking at things like extended producer responsibility, it’s not just when the garment leaves your shop and you part ways with it. You have to think, ‘How do you recuperate that carbon and reintroduce it into the cycle?'”

At the end of the day, when looking at the circular economy, infrastructure is a huge component of that. “In terms of recycling infrastructure, there’s also a role to play for governments to really incentivize,” said Op de Beeck. “It’s not something an individual brand can set up in a country.”

Related Articles

More from our brands