By Pedro Faria, Technical Director, CDP
This week Walmart became the 26th company to successfully set greenhouse gas emissions reduction targets that are in line with what climate science says is necessary to keep global warming below two degrees centigrade. Approving Walmart's science-based target marks a turning point for the Science Based Targets initiative - a partnership between CDP, WWF, WRI and the UN Global Compact. Walmart is not only the first retailer to have set a Science Based Target, it is also the world's largest retailer. Indeed, Walmart ranks 15th on Forbes' Global 2000 list of the world's biggest and most powerful public companies, as measured by a composite score of revenues, profits, assets and market value. Given the scale of the company's operations and market capitalization, this shows that, science-based targets are quickly going mainstream.
Walmart has committed to reduce its absolute emissions by 18% by 2025, from 2015 levels. Walmart will also work with suppliers and customers to reduce greenhouse gas emissions from the manufacture and use of their products by one billion tons between 2015 and 2030. The vast majority of Walmart's emissions are located in its value chain so this latter target (known as scope 3) is particularly significant. Indeed, the requirement for companies to set scope 3 targets is one thing that sets the Science Based Target initiative apart. If emissions from a company's value chain account for more than 40% of the total, then our experts require it to set an ambitious and measurable target to reduce these emissions within a clear time-frame. The good news for Walmart is that many of their suppliers - including Dell, Diageo, General Mills, Kellogg, and Sony - already have science-based targets.
What does this mean for global warming?
The direct emissions reductions Walmart has promised to make will prevent tons of CO2 from entering the atmosphere over the next decade. In addition, the knock-on effect up and down their value chain will multiply the positive impact that the company's move will have on global emissions. Beyond this, the example that Walmart's leadership sets is hugely significant and will help generate momentum to spur other retailers and consumer-facing companies to follow suit. The potential for businesses to play a positive role in driving down global emissions, and ensuring the world meet its pledges made in the Paris Agreement is immense. And without ambitious leadership and innovation from business, governments will fail to close the gap between projected emissions and the levels that scientists say are safe.
In the end, this leadership will also benefit the companies themselves. As Diane Holdorf, Chief Sustainability Officer at Kellogg Company explains: "Science Based Targets help protect the planet for the long term, on which our business depends." In setting a Science Based Target, Walmart has joined a group of the world's most progressive companies. The 193 companies that have committed to setting science-based targets (including the 26 that have had their targets approved) realise the growth opportunity that tackling climate change presents and are reducing their emissions enough to be ahead of the game. They are not only preparing themselves for a smooth transition to the low-carbon economy, but are also incentivising others to do the same. At the Science Based Targets initiative, our goal is for science-based target setting to become standard business practice. Walmart's move shows that this is well on the way to happening.