Walmart makes big sustainability pledge in China
Walmart says it will cut 50 million metric tons of carbon emissions from its Chinese operations as part of its efforts to remove 1 billion tons of carbon dioxide from its global value chain by 2030.
Walmart says the planned reductions are equivalent to emissions from the annual electricity consumption of 40 million Chinese households.
In recent years, more foreign companies have launched environmentally friendly products in China and or extended benefits for workers to stay in Beijing’s good graces. Starbucks Corp. provides health insurance that extends to Chinese employees’ parents, and Volvo AB is investing millions in a China factory that will make high-performance electric cars.
“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,” said McMillon. “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.”
McMillon delivered the speech to professors, students, Walmart associates, suppliers and NGO representatives at the Tsinghua Forum, the University’s renowned lectureship series. Expanding Project Gigaton into China 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. 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.
“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,” said Wern-Yuen Tan, president and CEO of Walmart China. “Integrating more sustainable practices into our operations, resource management and sourcing efforts can spur technological innovation, inspire brand loyalty and increase associate engagement.”
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.
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 percent 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 US$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 percent 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.”
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 percent by 2025, 70 percent below 2005 levels. This is part of a global goal to reduce emissions in company operations 18 percent 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 carbon emissions by more than half on a per sales dollar basis over the last decade. Additionally, Walmart will be among the first companies to trial the Ministry of Commerce’s (MOFCOM) new voluntary Green Building Certification Program for Hypermarkets in the coming year.
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 also plans to support renewable energy access by working with government, industry peers, suppliers and development partners.
Additionally, Walmart is working with the Ministry of Commerce (MOFCOM) 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.