When it comes to saving energy and pursuing sustainability, corporate peer pressure can be a wonderful thing.
That’s the experience of Walmart, which since 2010 has been using its own environmental policies, along with its considerable corporate muscle, to persuade suppliers to join its ongoing campaign to reduce carbon emissions.
The world’s biggest retailer has set a five-year goal of cutting its own greenhouse gas emissions by 20 million metric tons by the end of 2015, using a range of measures including buying renewable electricity from the grid and generating its own power from green sources. Altogether, it obtained 22 percent of its power from renewable energy in 2010.
Read more about Walmart’s own drive to hit 100% renewable energy here.
Now, it’s stepping up efforts to spread the clean energy gospel by doubling the number of suppliers it is inviting to join in its sustainability program. Walmart seeks sustainability partners by asking them first to fill out a detailed questionnaire on their energy-saving policies.
Of about 1,500 companies were asked to fill out the forms in 2011, about half did so and around 300 implemented greenhouse-gas reducing measures. This year, Walmart’s sustainability team is seeking support from 3,000 partners.
Bold Name Partners Join In
Participants include such household names as Coca-Cola, Johnson & Johnson, Microsoft and Unilever, all of which answer questions on how they use energy and whether they are pursuing policies designed to reduce their carbon footprint.
The wide-ranging survey is “not for the faint of heart”, said Rob Kaplan, a senior manager of sustainability at Wal-Mart, and one of a team of 15. The rigorous nature of the questions makes it an especially valuable exercise for smaller companies who probably don’t have their own sustainability team, and so stand to learn the most from the questions, Kaplan told Breaking Energy.
Participants are asked probing questions such as whether climate change is integrated into their business strategy; whether they provide incentives for management of climate-change issues, and whether they work with policy makers to promote action on the issue.
The questionnaire is the work of the Carbon Disclosure Project, an independent nonprofit that promotes corporate policies on energy efficiency and climate change, and has been working with Wal-Mart since 2006.
Responses sometimes reveal that suppliers have sustainability policies that Walmart was previously unaware of, Kaplan said. “There’s a lot of energy-efficiency programs that suppliers have undertaken that we didn’t know about,” he said.
Participating suppliers are motivated to cut energy use in part by the prospect of cost savings, but also to burnish their green credentials in an environmentally conscious market place, Kaplan said.
Treading Softly, Carrying a Huge Customer Base
Walmart isn’t directly tying valuable contracts to its suppliers’ willingness to sign up to sustainability goals, Kaplan said.
But participation certainly isn’t going to hurt their relationship with the giant retailer.
“If you want to play with Walmart, sustainability is a big part of that,” Kaplan said.
In its effort to win corporate converts to the sustainability cause, Wal-Mart is also urging investors to demand that companies follow the environmental standards.
“Information is disclosed to Wall Street and companies are held to the same standards of disclosure,” Kaplan said.
Walmart is hoping its suppliers follow its own sustainability efforts. The company says it has eliminated some 120,000 metric tonnes of greenhouse gas emissions, thanks to measures as simple as adjusting freezer temperatures. In addition, the company says it has identified projects with the potential to reduce emissions by a combined 16 million metric tonnes.
