Walmart, Carbon, and Lessons for Woolworths

The recent announcement by Walmart to reduce its carbon footprint has thrown down the challenge to other global retailers such as the UK’s Tesco and Australia’s Woolworths. Until this announcement all three essentially had drawn an imaginary wall around their business and set targets that were, a) related to their direct property and operations, b) therefore under their direct control. A diagram from the Tesco site shows this quite clearly.

The Walmart announcement goes much further whereby they announced that they would remove 20m metric tons of Greenhouse Gas Emissions from the Global Supply Chain by 2015. This is new and different as they will now work with their suppliers and look at  the entire lifecycle of a product, from sourcing of raw materials, manufacturing, transportation, customer use to end-of-life disposal.

Walmart will work with its suppliers to indentify the largest opportunities and address them. It won’t all be easy as it needs to prove that the supplier would not have undertaken some action under their own reduction programmes.  

However it’s not all rosy as the company is growing so quickly that these savings will only ensure that the carbon footprint growth is covered – with some to spare – but still equivalent to taking 3.8 m cars off the road!

The challenge for both Tesco and Woolworths is to follow suit in a way that they can control. To date Woolworths has set out targets as follows:

• 40% reduction in carbon emissions on projected growth levels by 2015, bringing emissions back to 2006 levels

• Reduce water usage by at least 200 million litres a year by 2010

• 3.4 million reusable crates to replace single-use waxed boxes

• Zero food waste in the general waste stream by 2015

• 25% reduction in carbon emissions per carton delivered by Woolworths-owned trucks by 2012

Woolworths has already changed its car fleet over from petrol to diesel and hybrid models and opened up “green stores”. With common suppliers such as Procter & Gamble, Unilever, Coca-Cola, PepsiCo, Kraft, Sony, Apple, HP, and Dell Woolworths could piggyback the Walmart decision and get significant supply chain improvements.

Let’s hope they take this easy option and leverage the Walmart activity. At the same time it’s important for Woolworths to look at all their suppliers and identify their local opportunities also; for the larger supply-chain footprint is where the real carbon footprint savings lie.