Nearly two decades into its sustainability journey, Walmart has made progress on waste and energy, but must look to procurement for further progress
Almost two decades after Walmart’s then-CEO Lee Scott announced a landmark sustainability strategy, the retail giant’s journey offers a complex view of ambitious goals and tangible, if incomplete, achievements.
The original 2005 pledge, delivered at the company’s Arkansas headquarters, was to power operations with 100% renewable energy, create zero waste and sell products that sustain the planet’s resources.
These targets were for their time, preceding the Paris Agreement by a decade.
“These goals are both ambitious and aspirational, and I’m not sure how to achieve them, at least not yet,” Lee explained at the time, reflecting the nascent state of corporate sustainability in 2005.
While leadership has since changed hands, his successors have continued on this path toward the vision he established.
Progress on energy and waste goals
According to Walmart’s latest ESG report, progress toward the first goal is evident with 48.5% of Walmart’s global electricity needs now sourced from renewables.
The report also notes that Scope 1 and 2 emissions have decreased by 18.1% from a 2015 baseline.
When it comes to achieving zero waste, Walmart has made substantial headway, diverting 83.5% of its global waste from landfill. However critics point out that, with its inflation-adjusted global revenue growing 44% to US$681bn since 2015, the retailer could be accelerating its sustainability efforts.
Jon Johnson, a Professor at the University of Arkansas’s Walton College of Business, provides a candid evaluation of Walmart’s performance.
“I would give them an A or A-minus on their waste and energy goals,” he says. “I give them a C on their product goals and that would be a generous C.”
The sustainable product procurement challenge
The third objective, focused on selling more sustainable products, has proven to be the most difficult to implement. This goal directly impacts Walmart’s vast and complex procurement operations.
Jon, who co-founded The Sustainability Consortium in 2009 to create metrics for evaluating product impacts across supply chains, notes a gap between data and action.
“Walmart never used that information to make procurement decisions at any scale that had the effect we were hoping it would,” he says.
This highlights a critical challenge in corporate sustainability turning insightful data into effective procurement strategy.
Influencing broader supply chain practices
Despite shortfalls in its own product goals, Walmart’s sustainability initiatives have had an impact on the wider retail industry and its supply chains.
Elizabeth Sturcken, Vice President for Net Zero Ambition and Action at the Environmental Defense Fund, points to Walmart’s 2017 chemical footprint goal as a key example of its influence.
“You got very real ripple effects throughout the entire industry,” she says, highlighting that competitors like Target and Dollar General subsequently introduced similar commitments.
This demonstrates how a single major retailer’s procurement policies can set new standards for suppliers across the board.
Ken Cook, President of the Environmental Working Group, explains how the Environmental Working Group’s campaigning led Walmart to mandate that its suppliers limit certain chemicals in household and personal care products.
“EWG is not interested in things that don’t make landscape-level changes,” he said. “This is what Walmart has provided.”
Walmart, however, continues to face criticism regarding supply chain traceability for deforestation and an over-reliance on voluntary supplier actions for its packaging goals. Scope 3 emissions – those originating from the supply chain – have also risen by approximately 4% in the last two years, a concern for any procurement-led sustainability effort.
Kathleen McLaughlin, the current CSO, defends Walmart’s strategy.
“We’re not a perfect company,” she says. “One of the things that is pretty deep at Walmart though is really listening to everybody to critics and to stakeholders.
“The easier things have been tackled. We’re now in the throes of true system transformation and that’s hard work.”
This work continues to be shaped by the vision Lee set out two decades ago, a vision that, according to current Walmart CEO Doug McMillon, “challenged us to think differently about leadership and to use our influence and resources to make this country and the planet an even better place for everyone”.
Leave feedback about this