Is Walmart’s rollback on its carbon goals a sign of corporate withdrawals to come?
Certainly, the world’s No. 1 retailer’s announcement that it’s poised to undershoot its targets to reduce planet-heating emissions by the end of the decade doesn’t augur well for the industry at large.
While Walmart pledged to slash greenhouse gas emissions from its own operations—that is to say, Scopes 1 and 2—by 35 percent in 2025 and 65 percent in 2030 compared with 2015 levels, it has so far only managed to curtail 19.3 percent. The big box’s “aspirational goal” of zero emissions by 2040 also appears a little further out of reach: While its emissions intensity continued to decline, dropping 2 percent year-over-year, its operational emissions rose by 3.9 percent in 2023 because of what it said was largely due to aging, high-emitting refrigeration equipment, transportation-related emissions from changing routes and a growing fleet, and a slowing of renewable energy expansion relative to its business growth.
Related Stories
Because of this and many factors beyond its control, including public policy, the availability and cost-effectiveness of low-carbon technologies, and “broad sectoral transitions” in energy systems, transportation, materials and agriculture, progress “will not be linear,” Walmart said. “We will continue to report progress and in 2025 will consider revising our targets based on the best available information and assumptions at that time.”
There was, however, some good news mixed in with the bad. Walmart said it fulfilled its Project Gigaton goal of reducing, avoiding or sequestering 1 billion metric tons of greenhouse gases from its global supply chain—meaning, Scope 3—six years ahead of its 2030 schedule. That’s the equivalent, the Arkansas-headquartered firm said, of taking 200 million passenger vehicles off U.S. roads for a year.
But Walmart admitted in its update that though many projects that “produce a positive result” under Project Gigaton can also “positively impact” its Scope 3 footprint, data gaps and underdeveloped Scope 3 footprint estimation methodologies mean that these efforts and results “cannot be fully reconciled” as yet.
Any improvements in its Scope 3 footprint also depend on a swath of determinants, including some that are, again, outside its realm of influence, such as changes in energy grids in regions from where it sources and where its customers reside, agricultural production means, transportation technologies, waste handling infrastructure, customer purchasing decisions, inflationary or deflationary pressures, government policy and supplier upgrades that can provide meaningful changes.
Ken Pucker, adjunct professor of business administration at The Fletcher School at Tufts University, said this was the “larger story.” As disappointing as the news about Walmart’s Scope 1 and 2 emissions may be, he said, they represent less than 3 percent of its Scope 3, which climbed 5.3 percent between 2022 and 2023, even as carbon intensity fell by 0.7 percent.
What the news signifies, however, is that Walmart is joining the expanding ranks of major brands, including Coca-Cola and Unilever, that are “retreating from prior self-defined sustainability goals,” Pucker said. A September report from Bain & Co. found that more than one-third of businesses were missing their Scope 1 and 2 targets and over half were shorting their Scope 3 ones. And while 60 percent of consumers said they were more concerned about climate change than they were two years ago, CEOs cited AI, inflation, growth and geopolitical uncertainty as more pressing themes.
But it could also be that companies’ original targets weren’t realistic in the first place, said Francois Souchet, managing director of advisory firm Swanstant. One reason that a gap exists between ambition and reality is that most organizations set climate targets, based on science, “without clear roadmaps for achieving them or readying their organizations and operations to deliver them,” he said.
Another is that an industry based on continual growth as a measure of success is fundamentally at odds with even the most well-meaning of sustainability efforts.
“In a linear system where growth relies on making more products, marginal reductions in carbon emissions are often offset by business growth,” Souchet said. “Reconfiguring businesses toward more decoupled economic models is increasingly critical for businesses to achieve their emission targets.”
