Wal-Mart

Sector: Corporate

Employees:

> 1,900,000 employees (March 2007)

Carbon Footprint:

> 19,136,882 metric tonnes CO₂e (2006)

TARGETS

> Cut energy use at its 7,000+ stores worldwide by 30%.
> Reduce greenhouse gas emissions by 20% at existing stores in seven years.
> Sell 100 million compact fluorescent light bulbs per annum by 2008.
> Increase fuel efficiency of trucking fleet by 25% over three years and double efficiency within 10 years.
> Reduce packaging by 5% by 2013.
> Reduce solid waste by 25% from US stores within three years.
> Transform Wal-Mart into a company that runs on 100% renewable energy and produces zero waste.

Achievements

> Invests US$ 500 million per annum in energy-saving technologies.

Benefits

> Is poised to save US$ 3.4 billion by reducing packaging 5%.
> By reducing the packaging on fewer than 300 toys Wal-Mart saved US$ 3.5 million in transportation costs, in just one year.

Low Carbon Solutions

Background

Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. Wal-Mart is the number one retailer in the world with revenues over US$ 300 billion and is ranked 2nd on the Fortune 500. The company is such a large player in retail market that any actions to combat climate change have a worldwide effect. Wal-Mart serves 137 million customers per week and has over 60,000 suppliers. Its efforts to address climate change affect the price of the renewable energy and energy efficiency markets, accelerating the world’s ability to develop a low carbon economy.

Wal-Mart has been part of the ever-increasing US group of companies calling on the United States federal government for climate regulation.

As the largest private electricity user in the US, Wal-Mart’s first action to tackle climate change has been through energy efficiency. Wal-Mart plans to cut energy use at its 7,000+ stores worldwide by 30% and cut GHG emissions at existing stores by 20% in seven years. Wal-Mart is aiming to meet these goals by investing in energy efficiency technology and smart energy use.
The company spent about US$ 30 million to develop a refrigerator LED lighting system with General Electric and Royal Philips Electronics. The LED lighting cuts 50% of the cost of lighting. Wal-Mart also began using LED lights in its giant, red Wal-Mart signs about two years ago.
In its new high-efficiency stores in Kansas City and Rockland, Illinois, US, the company will target two main energy-consuming units: the heating and air conditioning system (HVAC), and the refrigeration system. Specifically, the new HVAC and more efficient refrigeration systems are fully integrated so that 100% of the heat rejected by the refrigeration system is reclaimed into the HVAC.
Other energy saving technologies include the installation of ultra-efficient case fans, glass doors on medium temperature grocery cases, RollSeal quick response doors to seal air in areas such as the Garden Centre, and a top-of-the-line dehumidification system. The news stores will also have a daylight harvesting system, which uses skylights to refract daylight throughout the store and light sensors to monitor the amount of natural light available. During periods of higher natural daylight, the system then dims or turns off the store lights when they aren’t needed, thereby reducing energy use.

To manage its sustainability initiatives, Wal-Mart has formed 14 sustainable value networks made up of employees, suppliers and environmentalists. The groups get together regularly in person or on conference calls to brainstorm how products that don’t “hurt” the environment can be made or bought. The networks work with Wal-Mart’s buyers and suppliers, and the suppliers of its suppliers, to push change all the way down the business chain.

Wal-Mart reports its GHG emissions annually to The Carbon Disclosure Project and is launching an annual sustainability report in 2007.

Wal-Mart is involved in a number of partnerships from its sustainable value networks which include suppliers and NGOs to technology-based partnerships with GE, Royal Phillips Electronics, BP and more. For example, the Wal-Mart Sustainable Packaging Value Network, a group of 200 leaders in the global packaging industry, includes representatives from government, NGOs, academia and industry whose aim is reduce the amount of packaging used to deliver products to customers. Wal-Mart has collaborated with designers like Arup and think-tanks like the Rocky Mountain Institute to plan and implement its experimental stores.

Wal-Mart recognises that its real impact comes in the products it sells its customers. Wal-Mart has begun to market products with a smaller carbon footprint starting with heavily promoting All Small & Mighty, Unilever’s concentrated detergent that comes in a bottle two-thirds the size of a regular jug of detergent. The size and reduced weight of the concentrated liquid reduces the energy needed to transport the detergent. Another low-carbon product goal is to sell 100 million compact fluorescent bulbs a year by 2008. If Wal-Mart succeeds, total sales of the bulbs in the US would increase by 50%, saving Americans US$ 3 billion in electricity costs and avoiding the need to build additional power plants for the equivalent of 450,000 new homes.

Wal-Mart launched a programme in March 2007 to test the use of solar power at 22 of its locations in Hawaii and California, US. The solar systems are designed to supply up to 30% of power for each store where the panels are located. Wal-Mart is purchasing solar power equipment from BP Solar, SunEdison LLC, and PowerLight, a subsidiary of SunPower Corp. Once all the equipment for the test is up and running, Wal-Mart estimates, the system will generate up to 20 million kWh of electricity per year. The company said the initiative was among the largest solar installations in the US and the top 10 in the world.

In October 2006, Lee Scott, the current president and CEO of Wal-Mart, announced the over-arching goal to transform Wal-Mart into a company that runs on 100% renewable energy and produces zero waste. Underlying Wal-Mart targets and programmes is “Sustainability 360”, Lee Scott’s companywide emphasis on taking sustainability beyond reducing the company’s direct environmental footprint to engaging Wal-Mart’s associates, suppliers, communities, and customers. Wal-Mart is also introducing “Global Innovation Projects”, one of which is a challenge for Wal-Mart associates and suppliers to start thinking about how to remove non-renewable energy from the products the company sells.

With a 100,000 mile supply chain with an estimated 220 million tons of emissions directly related to Wal-Mart products, Wal-Mart’s biggest contribution to tackling climate change may be the effect it has up and down its supply chain. Wal-Mart began by looking at its supply chain by launching the Packaging Scorecard to meet its goal of reducing packaging 5% by 2013. The scorecard, which was officially unveiled at the Clinton Global Initiative in September 2006 and launched on February 1, 2007, evaluates Wal-Mart and Sam’s Club suppliers on the sustainability of their packaging and offers suggestions for improvement. The results from the operation to date show active use of the scorecard and a strong interest from product suppliers to make their packaging more sustainable. It is expected that this initiative will create US$ 10.98 billion in savings, with Wal-Mart alone poised to save US$ 3.4 billion. For one year, these suppliers will learn and share results within this process. And beginning in 2008, Wal-Mart will measure and recognise the entire worldwide supply base for using less packaging, utilising more effective materials in packaging, and sourcing these materials more efficiently through a packaging scorecard. Wal-Mart’s Packaging Scorecard was motivated by the positive results the company experienced by reducing the packaging on fewer than 300 toys. Wal-Mart was able to save 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and US$ 3.5 million in transportation costs, in just one year with that one initiative.

Wal-Mart is working to realise a 30% energy reduction in all new stores and a 20% reduction in existing stores leading to carbon neutral operations in the future. The “Design Development Collective” is a group of designers and Wal-Mart staff who have been researching, developing, and integrating sustainable systems in Wal-Mart’s stores.
Wal-Mart started by developing experimental stores in the US, designed by Arup and LPA, located in McKinney, Texas and Aurora, Colorado. They utilise many sustainable technologies including biofuel boilers, wind turbines, radiant floor heating, indirect-evaporative cooling, energy-efficient LED lighting, solar-powered traffic lights and xeriscaping. Energy use for the McKinney, Texas stores is expected to reduce energy use by 30-50% and save five million gallons of water per year. After a three-year period, the results of the experiment will be evaluated and applied to the construction, maintenance and operation of other Wal-Mart facilities. These results will be shared with the industry, the general public and relevant government agencies.
Wal-Mart has now begun opening stores 25 to 30% more efficient than the average store, starting with “The Kansas City High-Efficiency store”. Wal-Mart understands that energy use affects the bottom line and has teamed with Arup, a global firm of designers, engineers and business consultants, to work on sustainable building techniques in the stores.