Corporate sustainability: Even Walmart can’t do it alone
Ten years ago, the CEO of Walmart and the president of Environmental Defense Fund hiked together on Mount Washington in New Hampshire. Along the way, Lee Scott of Walmart (now retired) and Fred Krupp of EDF talked about climate change and the environmental challenges of our time. They also talked about ways that Walmart could drive positive environmental change in its product lines and operations.
The hike turned out to be the start of a 10-year journey of collaboration between Walmart and EDF, one that has helped define a new model of corporate sustainability.
In a speech that year, Lee Scott laid out three aspirational goals.
“Our environmental goals at Walmart are simple and straightforward:
To be supplied 100 percent by renewable energy.
To create zero waste.
To sell products that sustain our resources and environment.
These goals are both ambitious and aspirational, and I’m not sure how to achieve them ... at least not yet. This obviously will take some time.”
Now, on the ten-year anniversary of the 21st Century Leadership speech, EDF is taking a moment to take stock of how far this journey has taken us and the distance left to travel.
First, what have we achieved? Here are three of our proudest accomplishments.
Today, Walmart is announcing that it will surpass its aggressive goal of reducing 20 MMT of greenhouse gas emissions from its supply chain. In total, Walmart will reduce 28 MMT of GHG from its supply chain by the end of 2015. To achieve this goal, Walmart tackled a diverse range of projects: from helping end consumers through improving products like LED light bulbs; to creating a Closed Loop Recycling fund, and changing food date labeling to reduce waste; and working with EDF to conserve fertilizer use on over 20 million acres of U.S. farmland. Overall, the 20 MMT reduction of GHG from Walmart’s supply chain is the equivalent of getting almost six million cars off the road. Yes, EDF pushed Walmart to set this goal; but we also worked side by side with them to achieve it. It is this type of long-term collaboration that drives results at scale, an achievement foreshadowed by EDF president Fred Krupp when he said, "When you can get big companies to do important things, you can change the world."
In 2013, Walmart put a chemicals policy in place that is phasing out chemicals of concern in over 100,000 home and personal care products like laundry soap and shampoo. Private brand products now list all of their ingredients online so consumers have more transparency into what chemicals they are using in their home and on their bodies.
EDF and Walmart helped create the Sustainability Index, a tool powered by The Sustainability Consortium (TSC) that has evaluated billions of dollars of products on Walmart shelves. To date, 70% of Walmart suppliers have filled out the Index.
Second, how have we achieved these successes? In a word: Collaboration. The type of close collaboration that saw EDF setting up an office of experts in Bentonville, AR to dig into the nuts and bolts of the world’s largest retail supply chain. As different as our organizations may be, we both understood that we were facing environmental challenges that demanded market based solutions, delivered at a scale. Ten years ago, neither one of us had a clear idea of how we would attain these goals, but we knew we had to bring our comparative advantages to the table and try.
One of the first challenges the EDF team pushed with Walmart was to follow the science and incorporate climate into its goals. Walmart agreed. No one knew precisely how Walmart could reduce 20 MMT of greenhouse gases from its supply chain, but we both knew that when you set audacious goals, innovation tends to follow. And analyzing the supply chain, we found that a huge source of greenhouse gas emissions was fertilizer loss (or runoff) on farms.
Taking advantage of EDF’s history of working with farmers, we were able to work with stakeholders all along the supply chain – food companies, agricultural retailers, and farmers – to optimize fertilizer use while maintaining crop yields. Now, multiple companies have committed to optimizing fertilizer use on over 20 million acres of U.S. farms, saving farmers money while reducing climate impacts. It’s an approach to environmental innovation that is a win for sustainability and for profitability.
Taking on toxic chemicals in products was also a huge hurdle. Our 40-year-old chemical safety laws were badly broken; the cause of reform had been stalled in Congress for years. EDF saw that the consumer’s health needs couldn’t wait and Walmart agreed. In 2013, Walmart launched a new Policy on Sustainable Chemistry in Consumables to its suppliers. This policy identified about ten chemicals of concern for reduction, restriction and elimination. In 2014, it joined Target to host a first of its kind sustainability summit with other retailers to motivate supply chains to be more transparent about the chemicals in their beauty and personal care products. Walmart is working on labeling all of its private brand home and personal care products in accordance with the U.S. EPA’s Safer Choice Labeling program, which meets the highest standards of safety.
Early on, we recognized that we couldn’t manage what we couldn’t measure. That’s why EDF and Walmart worked together to create an Index to accurately quantify and communicate the degree to which any particular product is (or is not) sustainable. When you have hundreds of thousands of products on the shelves of any given store, documenting this is challenging at best.. Suppliers were asked a huge range of questions, from how much water and fertilizer was used to grow wheat or corn, to the mining practices used to extract natural elements used in computers or jewelry. The Sustainability Index uses the science and tools developed by The Sustainability Consortium (TSC), which now has over 100 global members including companies, universities and NGOs. At this point, thousands of products have been evaluated and last spring this information became customer facing for the first time through Sustainability Leaders badges that appear on Walmart.com.
As EDF and Walmart traversed this increasingly complex path over the past ten years, I admit that we threw a lot of ideas against the wall. Some stuck, some didn’t.
I recognize that there will always be the challenge of balancing short-term financial pressure against long-term environmental risks. These two challenges will increasingly converge as extreme weather disrupts business operations and as we struggle to provide food and products to a growing population without wiping out all of our natural reserves.
Moving toward the climate talks in Paris later this month, EDF is looking for corporate leaders to step up even more on climate — making public, science-based commitments and creating an environment where denial and delay by private and public sector leaders is no longer acceptable. As we’ve learned through our 10-year journey with Walmart, tending one’s own sustainability garden is necessary but no longer sufficient; corporate leaders of today and tomorrow need to collaborate widely and consis