What is Wal-Mart`s

What is
Wal-Mart’s
true
Environmental
Footprint?
What is Wal-Mart’s True Environmental Footprint?
In October 2005, Wal-Mart announced that it was taking new environmental measures
to increase energy efficiency and to become a “good steward for the environment.”
Primary goals include eventually being powered by 100% renewable energy sources,
producing zero waste, and selling sustainable products.
With these goals, Wal-Mart has been building a greener, more responsible
reputation; however, there are fundamental contradictions between WalMart’s business model and environmental sustainability. The world’s largest
retailer, Wal-Mart’s annual revenues exceed that of the next five largest global
retailers combined, including European giants Carrefour, Metro, Tesco,
Schwarz Unternehemens Treuhand and the U.S.-based Kroger. The intensity
of Wal-Mart’s carbon footprint mirrors these numbers; Wal-Mart’s total
greenhouse gas emissions have hovered around 20 million metric tons in
the past few years, whereas latest figures from Carrefour and Tesco indicate
total emissions of approximately 4.8 million and 4 million metric tons,
respectively.1,2 If Wal-Mart were a nation, its carbon footprint would rank
as approximately the 80th most polluting country in the world, on par with
nations like Yemen, Jordan and the Dominican Republic.3 Even if other
retailers grow, Wal-Mart will continue to vastly outsize and out-pollute
its global competitors, making the company a critical part of any global
conversation about true sustainability and accountability measures.
A broad-scale view of Wal-Mart and its goals reveals problematic
environmental and climate change impacts when it comes to transportation,
land-use, energy consumption, waste and carbon emissions. The growth of
this inefficient model is increasing the environmental footprint of retailing
and consumption.
Energy and Greenhouse Gas Emissions
Wal-Mart has pledged to:
• Reduce greenhouse gas emissions at stores, clubs and distribution
centers around the world by 20 percent by 2012 (2005 baseline). 4
• Design and open a viable store prototype that is 25-30 percent more
energy efficient and will produce up to 30 percent fewer greenhouse
gas (GHG) emissions by 2009 globally (2005 baseline).5
• Retrofit low- and medium-refrigerated display cases at more than
500 U.S. stores with energy-savings light emitting diode (LED)
lighting by 2009 (2005 baseline). 6
• Double truck fleet efficiency in the U.S. by October 2015 (2005
baseline). 7
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Despite this, Wal-Mart’s underlying business model includes several
key unsustainable features including reliance on energy intensive 24-hour
operations, location of stores outside of urban cores, sourcing at a distance
and expanding retail space. As of 2010, there were more than 8,400 stores
and clubs around the world.8 Since 2008, Wal-Mart opened 191 Supercenters
in the U.S., and from 2009 to 2010, Wal-Mart added another 52 domestic
retail units. 9,10,11 Today, Wal-Mart operates 3,800 stores in the U.S., of which
2,900 are Supercenters.12 The expanding scale of Wal-Mart has important
implications for Wal-Mart’s growing environmental footprint, particularly
when it comes to energy, transportation and waste reduction.
Lighting and Energy Usage
One of Wal-Mart’s most successful campaigns has been the promotion of
compact fluorescent light bulbs (CFLs). Wal-Mart initially set out to sell 100
million CFLs by 2007 and surpassed that goal, posting sales of more than
460 million CFLs to date.13 Unfortunately, the energy and money saved by
customers from the sale of these light bulbs pales in comparison to the energy
used by Wal-Mart’s operations. For example, Wal-Mart’s mammoth-sized
Supercenters are powered by an enormous amount of energy; one major
contributing factor is that Wal-Mart runs a significant amount of 24-hour
operations, opposed to typical 12-hour operations. Even with a 15 percent
reduction of average energy use, the daily energy consumption of one WalMart Supercenter (approximately 28,274 kWh/day) is equivalent to the daily
energy usage of 1,095 U.S. homes.14
Shipping and Sourcing
Wal-Mart utilizes a sourcing model that depends on offshoring product
manufacturing in countries like China, which have low labor costs and less
carbon efficient manufacturing compared to the U.S. As of 2008, Wal-Mart’s
yearly procurement of Chinese goods stood at about $9 billion, a major
portion of the company’s direct purchases. 15 This consumption model has led
to a substantial amount of carbon emissions outsourcing and the continued
growth of greenhouse gas emissions in industrial nations. The U.S. is the
leading global consumer and importer of carbon emissions, whereas China
is the world’s leading carbon exporter.16 U.S. manufacturing processes also
tend to be cleaner and less carbon intensive than those where manufacturing
is often offshored; for example, U.S. steel manufacturing is amongst the least
energy and carbon intensive in the world. On the other hand, Chinese steel
manufacturing is the most carbon intensive of all major global steel producers
in the world. 17 Reversing these trends by sourcing locally and decreasing
shipping mileage would have significant, positive greenhouse impacts on
global retail practices and the environment.
3
Wal-Mart relies heavily on super-sized container ships to transport goods
from manufacturers to consumers. These mammoth vessels, some of which
carry Wal-Mart products, are responsible for adding approximately one
billion tons of carbon emissions to the atmosphere every year.18 In addition,
bunker fuel – the low-grade, high-sulfur fuel that powers these container
ships – has been linked to respiration problems, inflammation, cancer and
heart disease and approximately 64,000 deaths per year.19 Fifteen of these
super-sized container ships are capable of producing as much sulfur pollution
as all the cars in the world. 20 Emma Maersk, one of the world’s largest
container ships and a carrier of Wal-Mart products, can burn approximately
200 tons of fuel a day, emitting approximately 177,520 mega tons of carbon
per year (based on 280 days at sea).21
Transportation
Wal-Mart’s greenhouse gas emissions and environmental impact analysis fails
to account for one aspect of its business with very significant environmental
and carbon emissions impacts: consumer transportation emissions. The
expansion of big-box retailers like Wal-Mart has been accompanied by the
rise in miles Americans now drive in order to run errands and shop. While
the average American household now drives 4.4 percent less than it did in
2001, shopping-related driving has continued to grow, climbing 1.3 percent
to 3,102 miles per year for the average household.22 The energy usage and
carbon emissions associated with transportation to and from Wal-Mart
Supercenter locations negate many of the gains that Wal-Mart claims to be
making.
How much progress is Wal-Mart really making?
Wal-Mart’s greenhouse gas emissions profile showed a slight decline in
2009; however the company itself cites external factors such as mild weather
patterns as a contributing factor.23 The recent, approximate 1 percent
reduction in total global greenhouse gas emissions must also be considered
within the context of a severe economic recession. As of 2009, Wal-Mart was
only approximately halfway (10.61 percent) to reaching its goal of reducing
20 percent of greenhouse gas emissions by 2012 (based on a 2005 baseline).24
Big picture-wise, the company’s emissions have largely remained stable,
particularly in the U.S. market, where they have hovered around 15 million
metric tons of CO2 for the past several years.25 Had the company aimed to
steadily reduce U.S. emissions over the period of 2005-2012, it would have
attained nearly 2.9 percent reductions each year since 2005.
Wal-Mart also provides data on their carbon impact per unit of sales
(metric tonnes/$1M USD), a figure which has been declining over time. In
4
order to grasp the true impacts of these figures, we must better understand
trends in the type and volume of goods being sold by Wal-Mart. WalMart’s U.S. sales of groceries at Wal-Mart stores are growing steadily, from
49 percent in 2009 to 54 percent in 2011.26 In the U.S., consumption
of food products account for 8 percent of the carbon footprint, whereas
manufactured products account for 12 percent.27 This raises the question of
whether Wal-Mart’s decreasing carbon impact per sales are simply reflective
of shifts to sales of less carbon-intensive areas of the economy, e.g. food
products as opposed to manufactured goods, rather than concrete energy
efficiency measures.
The company also estimates its projected emissions reductions will more
than offset carbon emissions from growth over the five year duration of
2010-2015.28 Yet, as a whole, Wal-Mart’s emissions have been relatively
stable. In order for Wal-Mart to truly meet their emissions reductions goals
and offset emissions from growth, total carbon emissions and intensity must
drop aggressively, not merely level off.
True Sustainability
At best, Wal-Mart’s environmental initiatives have taken a limited approach
to reducing environmental impacts and costs. As the world’s largest retailer,
Wal-Mart’s public commitments have not translated into drastic greenhouse
gas emissions cuts and sweeping environmental change. The sustainability
measures Wal-Mart has taken within its business model fail to compensate
for the environmental harm inflicted by the business model as a whole.
Even as greenhouse gas emissions stabilize, a look into Wal-Mart sales and
emissions raises questions over the factors propelling any possible gains,
whether it be a shift in the types of products sold, or the influence of
external factors. Most of all, the question remains -- is Wal-Mart taking the
meaningful, responsible actions necessary to meet their targets?
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Endnotes
1 Ecodesk Beta. Carrefour. 2010. http://www.ecodesk.com/
sustainability/carrefour-group/
2 Tesco. Measuring Our Carbon Footprint. http://www.tesco.com/
climatechange/carbonFootprint.asp
3 International Energy Agency. 2010. CO2 Emissions from
Fuel Combusion, Highlights. http://www.iea.org/co2highlights/
CO2highlights.pdf
16 Davis, Steven J. and Ken Caldeira. 2010. Consumption-based
accounting of CO2 emissions. Proceedings of the National Academy
of Sciences (PNAS) Early Edition. January 29. http://www.pnas.org/
content/early/2010/02/23/0906974107.full.pdf
17 International Energy Agency, CO2 Emissions from Fuel
Combustion 2009 Edition (Paris, France: International Energy Agency,
2009).
4 Wal-Mart Global Sustainability Report 2010 Progress Update.
http://Wal-Martstores.com/sites/sustainabilityreport/2010/
commitments_energy.aspx
18 Pearce, Fred. 2009. How 16 ships create as much pollution as all
the cars in the world. Daily Mail Online. November 21. http://www.
dailymail.co.uk/sciencetech/article-1229857/How-16-ships-createpollution-cars-world.html
5 Ibid.
19 6 Ibid.
7 Ibid.
20 Vidal, John. 2009. Health risks of shipping pollution have been
‘underestimated.’ Guardian, April 9. http://www.guardian.co.uk/
environment/2009/apr/09/shipping-pollution
8 Wal-Mart Global Sustainability Report: 2010. http://Wal-Martstores.
com/sites/sustainabilityreport/2010/
9 Wal-Mart Global Sustainability Report: 2007-2008. http://WalMartstores.com/sites/sustainabilityreport/2007
10 Wal-Mart Global Sustainability Report: 2009. http://WalMartstores.com/sites/sustainabilityreport/2009/
11 Wal-Mart Global Sustainability Report: 2010. http://WalMartstores.com/sites/sustainabilityreport/2010/
12 Wal-Mart 2011 Global Responsibility Report. http://WalMartstores.com/sites/ResponsibilityReport/2011/default.aspx
13 Wal-Mart 2011 Global Responsibility Report. http://WalMartstores.com/sites/ResponsibilityReport/2011/default.aspx
14 Courtemanch, Aly and Lani Bensheimer. 2005. Environmental
Impacts of the Proposed Wal-mart Supercenter in Potsdam.
Conservation Biology, April 29. p21. http://it.stlawu.edu/~bart/
Barthelmess/CB2005_final_papers/pdfs/potsdam_Wal-Mart.pdf
15 AFX news Limited. 2008. Wal-Mart sees China procurement steady
this year at 9bln usd. Thomson Reuters. February 25. http://www.forbes.
com/feeds/afx/2008/02/25/afx4690144.html
Ibid.
21 Maersk Line. 2008. Maersk CO2 output ‘equal to Denmark.’ http://
www.emma-maersk.com/news/3885/Maersk_CO2_output_equal.html
22 U.S. Department of Transportation. 2009 National Household
Travel Survey. http://nhts.ornl.gov/
23 Wal-Mart 2011 Global Responsibility Report. http://WalMartstores.com/sites/ResponsibilityReport/2011/default.aspx
24 Wal-Mart 2011 Global Responsibility Report. http://WalMartstores.com/sites/ResponsibilityReport/2011/default.aspx
25 Wal-Mart 2011 Global Responsibility Report. http://WalMartstores.com/sites/ResponsibilityReport/2011/default.aspx
26 RetailSails. Wal-Mart. http://retailsails.com/monthly-salessummary/wmt/
27 Hertwich, Edgar G and Glen P. Peters. 2009. Carbon Footprint
of Nations: A Global, Trade-Linked Analysis. Environmental Science
& Technology. May 12. http://pubs.acs.org/doi/pdfplus/10.1021/
es803496a
28 Mui, Ylan Q. 2010. Wal-Mart promises to lower greenhouse
gas emissions by 2015. The Washington Post. February 26. http://
www.washingtonpost.com/wp-dyn/content/article/2010/02/25/
AR2010022505453.html
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