{"id":26632,"date":"2017-11-15T22:53:41","date_gmt":"2017-11-16T03:53:41","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/walmart-sustainability-hub-the-village-for-climate-change-aware-companies-that-wants-save-the-planet\/"},"modified":"2017-11-15T22:55:55","modified_gmt":"2017-11-16T03:55:55","slug":"walmart-sustainability-hub-the-village-for-climate-change-aware-companies-that-want-to-save-the-planet","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/walmart-sustainability-hub-the-village-for-climate-change-aware-companies-that-want-to-save-the-planet\/","title":{"rendered":"Walmart Sustainability Hub, the \u201cvillage\u201d for Climate Change aware companies that want to save the planet"},"content":{"rendered":"

\u201cWalmart, the world largest retailer, has launched an initiative to remove 1 gigaton of greenhouse gas emissions (GHG) from its supply chain by 2030. To put that in perspective, that is the equivalent of removing the annual emissions of Germany \u2014 the world\u2019s fourth-largest economy \u2014 from the atmosphere.\u201d [1]<\/p>\n

Climate change is certainly one of the most urgent issues of our time. While it is easy to understand the ethical reasons to reduce GHG emissions to impact climate change, there are two main reasons why reducing GHG emission is also a great business opportunity:
\n\u2022 \u201csupply chains are vulnerable to risks and potential costs associated with the physical and regulatory threats related to global climate change\u201d [2];
\n\u2022 \u201cManaging greenhouse gas emissions has also been shown to enhance brand and market value in some circumstances\u201d [2].<\/p>\n

\"\"<\/a>
Figure 1: Climate Change Drivers<\/figcaption><\/figure>\n

The Sustainability Consortium stated that the modern supply chain is responsible for 60% of all greenhouse gas emissions, 80% of all water use, and 66% of all tropical deforestation.<\/p>\n

Walmart took the lead on GHG emission reduction in 2005, setting three main goals: create zero waste in company operations, operate with 100% renewable energy, sell products that sustain the environment. In the last few years, Walmart invested in alternative energy, particularly solar, creating thousands of job opportunities for American solar companies, and now obtains 25% of its energy from renewable sources. It also doubled the emission efficiency of the US fleet, achieving an emission reduction of 650,000 metric tons of CO2, saving nearly $1 Billion in 2015 [4].\u00a0But most important, Walmart managed to be the first retailer with an emission-reduction plan approved by the Science Based Target Initiative, that complies with the Paris Climate Change Agreement of December 2015. Under this plan, Walmart committed to aggressive long-term goals:
\n\u2022 18% emission reduction in the operations between 2015 and 2025 [4];
\n\u2022 Work with suppliers to reduce emissions by 1 Gigaton by 2030 [4].
\nThis second goal is particularly ambitious. Walmart will need to engage the thousands of companies involved in its supply chain. To do this, it created the Walmart Sustainability Hub, an online platform that gathers a community of suppliers willing to accept the challenge.<\/p>\n

\"\"<\/a>
Figure 2: Walmart Sustainability Webpage [5]<\/figcaption><\/figure>\n

In this platform, Walmart explains the project goal, why it decided to focus on particular areas, the so-called \u201cpillars\u201d (emissions, energy, agriculture, waste, packaging, deforestation, product use and design) and how it encourages suppliers to participate (Figure 3).<\/p>\n

\"\"<\/a>
Figure 3: How is Walmart encouraging suppliers to participate [5]<\/figcaption><\/figure>The pillars are described as specific enough to focus work, and broad enough to include a wide group of suppliers. Walmart worked together with NGOs, including World Wildlife Fund and Environmental Defense Fund (EDF), creating the emissions reduction toolkit, to explore opportunities for emission reduction in each pillar.<\/p>\n
\"\"<\/a>
Figure 4: The pillars<\/figcaption><\/figure>\n

For example, for waste, the toolkit includes:
\n\u2022 Benefits of reducing waste (e.g., reduce costs, increase efficient use of resources, reduce GHG emissions) [5];
\n\u2022 Relevant goals that companies might set (e.g., \u201cdivert 80% of solid waste in your operations by 2030\u201d) [5];
\n\u2022 Practical guidance on setting goals (e.g., guidelines to develop a general waste diversion plan, and opportunities for improvement for each step, see Figure 5 for details) [5];
\n\u2022 Guidelines to report your progress annually [5].<\/p>\n

\"\"<\/a>
Figure 5: “Guidance on setting a general waste reduction goal\u201d, and \u201cWhat will you report each year and how will it be converted to GHGs\u201d<\/figcaption><\/figure>\n

Moreover, suppliers are asked to contribute to the hub if they have alternative solutions to reduce any of the pillars.<\/p>\n

Walmart\u2019s action is certainly bold, it demonstrates unparalleled vision and leadership in the industry. The Hub provides toolkits, information, and, most important, a Hub to grow a community. However, a critical step of this process is convincing companies to make a big change in their operations to achieve long term benefits. Retail suppliers are traditionally skeptical about change, especially if that requires significant capital expenditures. For this reason, Walmart has room to improve its strategy to convince suppliers.<\/p>\n

For example, additional economic incentives guaranteed by Walmart to its suppliers would make them more eager to embrace the project. Furthermore, the Hub offers great support for the first steps of the project (commitment and execution), but limited resources are available for scaling, which is probably the hardest part of the implementation process.<\/p>\n

\u201cCompanies are not shrinking in the face of potential political opposition to climate goals\u2014they\u2019re doubling down\u201d said Carter Roberts, CEO of World Wildlife Fund [6]. Is this true? How many companies will be willing to leave their comfort zone, challenge Washington\u2019s political view about the issue, and start their sustainability journey? An initiative of this magnitude will take a village to execute. Will this village grow fast enough to reach such an ambitious goal?<\/p>\n

Word count: 800 words<\/p>\n

Bibliography:<\/p>\n

[1] Elizabeth Sturcken, \u201cWhy Walmart\u2019s Project Gigaton is corporate America\u2019s \u2018moonshot\u2019\u201d, Greenbiz, April 19, 2017, [https:\/\/www.greenbiz.com\/article\/why-walmarts-project-gigaton-corporate-americas-moonshot].<\/p>\n

[2] Chonnikarn (Fern) Jira, Michael W. Toffel, \u201cEngaging Supply Chains in Climate Change\u201d, 性视界 Business School, March 1, 2013, sec. 1, p. 1.<\/p>\n

[3] Thomas K. Dasaklis, Costas P. Pappis, \u201cSupply chain management in view of climate change: An overview of possible impacts and the road ahead\u201d, University of Piraeus, March 1, 2013, sec. 1.<\/p>\n

[4] Walmart company. \u201cCompany Overview\u201d. https:\/\/news.walmart.com\/2017\/04\/19\/walmart-launches-project-gigaton-to-reduce-emissions-in-companys-supply-chain, accessed November 2017.<\/p>\n

[5] Walmart Sustainability Hub, \u201c https:\/\/www.walmartsustainabilityhub.com, accessed November 2017.<\/p>\n

[6] Matthew Boyle, \u201cWalmart\u2019s wants suppliers to Eliminate a Gigaton of greenhouse gases by 2030\u201d, Bloomberg, April 20, 2017, [https:\/\/www.bloomberg.com\/news\/articles\/2017-04-20\/wal-mart-wants-suppliers-to-eliminate-a-gigaton-of-greenhouse-gases-by-2030]<\/p>\n","protected":false},"excerpt":{"rendered":"

Walmart wants its own supply chain to reduce GHG emissions by 1 Gigaton, the equivalent of removing the annual emissions of Germany \u2014 the world\u2019s fourth-largest economy \u2014 from the atmosphere. 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