As we work to understand and minimize our environmental footprint, reducing greenhouse gas emissions is one of the most effective places to begin. By doing so, we can restore balance to climate systems, save money for our customers and reduce our dependence on oil.
To meet these objectives, our Climate Change Network is committed to the following:
- Investing approximately $500 million annually in sustainable technologies and innovations;
- Reducing greenhouse gases at our existing stores, Sam’s Clubs and distribution centers around the world by 20 percent by 2012;
- Designing and opening a viable prototype store that is 25 to 30 percent more efficient and will produce up to 30 percent fewer greenhouse gas emissions within the next three years;
- Sharing what we learn with our stakeholders and competitors, so that more organizations embrace and utilize the technology, the market grows and our customers save more;
- Pursuing regulatory and policy changes that will create incentives for utilities to invest in energy efficiency, use low or no greenhouse gas sources of electricity, and reduce barriers to integrating these sources into the power grid;
- Assisting in the design and support of a Green Company program in China, where Wal-Mart will show preference to those suppliers and their factories involved in such a program;
- Improving our fleet fuel mileage efficiency through a combination of better aerodynamics, decreasing the size of packaging for items we sell, as well as other anticipated technological improvements; and
- Initiating a program in the United States with the help of the Carbon Disclosure Project to bring awareness to and eventually show preference to suppliers who set goals and aggressively reduce their own emissions.
By focusing on measuring Wal-Mart’s direct carbon footprint and identifying innovative ways that we can reduce greenhouse gas emissions of customers and suppliers, the Climate Change Network will complement the efforts of the Buildings and Logistics Networks, which are focused on reducing our direct footprint. So far, we have met our goals of establishing a 2005 CO2 baseline and reporting annually on our carbon footprint through the Carbon Disclosure Project.
Now that we understand our carbon footprint, we are taking a comprehensive approach to reducing our impact. In addition to looking at our own operations and working to reduce our reliance on non-renewable energy, we have introduced daylight harvesting and light-emitting diode (LED) lighting to our stores, and piloted a solar power project at stores in California and Hawaii. In our trucking fleet, we have set the goal to increase fleet efficiency by 25 percent by 2008.
Climate change is a global issue, so our efforts must be global in scope. In Mexico, we have signed a partnership with a wind-power-generating company to provide 34 percent of Wal-Mart de Mexico’s total energy. This will save $2.5 million per year. In the United Kingdom, ASDA submitted two planning applications in early 2007 for megawatt wind turbines at our distribution depots in Falkirk and Wakefield. Each turbine will generate enough energy to power the distribution depots – the equivalent of powering 1,100 homes.
We are also working with our suppliers and the businesses we serve to help them become more energy efficient. By giving them access to our highly trained efficiency experts, we are working with suppliers to lower their greenhouse gas footprints and save money. Additionally, through Sam’s Club, we’ve partnered with General Electric (GE) and Applied Energy Services (AES) to create a program in which we pool our expertise to help our small business owners who are Sam’s Club members run more energy-efficient businesses and save money on their energy bills. We conducted a pilot program in Phoenix and plan to test the program in other markets this year.
As the world’s largest retailer, we feel a responsibility to be engaged on a level that extends beyond our customers, our suppliers and our own operations. In April 2006 and May 2007, we were one of the first companies to go to Capitol Hill and testify in favor of a mandatory cap on carbon emissions.
We favor a cap system that provides incentives for customers to make sustainable choices that will ultimately lead to carbon reduction. We can play a unique role in aggregating compensation for carbon reduction and passing the value of that compensation onto our customers by making energy-efficient technologies more affordable. For example, a product such as a compact florescent light bulb has a higher purchase price than a less-efficient incandescent bulb. Aggregating compensation for carbon reduction for more efficient bulbs will allow us to make these bulbs accessible to more consumers by lowering their price. By providing incentives to customers to make better energy choices, we can play a powerful role in moving the consumer marketplace towards sustainable solutions for our climate.
In working to reduce our carbon footprint, one of our biggest challenges remains our growth. As we continue to grow, so does our carbon footprint – even if it grows at a much slower rate. However, we see our expansion as an opportunity to have a positive effect on absolute carbon because being a growth company enables us to explore and invest in new technologies that may lead to carbon reduction. These technologies (e.g., LED lights) have helped reduce carbon that would have otherwise been included in our footprint, and through our ability to bring them to scale, we can also help others afford and adopt them. By working to extend these technologies, not only do we accelerate our use of them, we will also be able to offer them to small businesses through Sam’s Clubs and to customers through our stores. Ultimately, we see our carbon footprint as extending beyond our own buildings and trucks to include our suppliers and customers. By doing so, we could have a net negative effect on absolute carbon.
Our carbon reduction efforts are not just limited to the United States. Internationally, ASDA participated in the pilot UK Emissions Trading Scheme last year. Because we expect global greenhouse gas regulation to expand and a carbon trading market to develop, our intent is to position Wal-Mart as a market aggregator of carbon credits.
Finally, through our Alternative Fuels Network, we have begun to address the challenge of pushing for innovation and alternative sources of energy. The Network's effort is guided by three goals-to raise ethanol use to 75 million gallons, increase consumption of bio-diesel by 2.6 million gallons, and incentivize innovation of renewable and alternative fuels. By doing things like increasing the amount E10 blending by expanding our E10 offering, committing to using 2 percent diesel in our entire private fleet and at all locations selling diesel products, and encouraging the advancement of hydrogen-based technologies, we will work towards transformative change throughout our supply chain.
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"Wal-Mart is not waiting for further study or for legal mandates to take strong action on climate change... we are proving that reducing greenhouse gas emissions through innovation adds value to our shareholders and our customers."
Andy Ruben, vice president of business strategy and sustainability, United States Senate Committee on Energy & Natural Resources, Climate Conference, April 4, 2006
Hughes Performance/Sharing Energy Efficient Practices with Small Businesses
At Sam’s Club, we are working to help business club members such as Hughes Performance, a family-owned racing parts manufacturer, identify ways to lower their energy use. Working with General Electric and Applied Energy Services, we assessed Hughes Performance’s energy consumption and made recommendations on how the company could become more efficient. Our recommendations focused mainly on retrofitting light fixtures with high-efficiency T-8 lighting. Hughes Performance stated that this simple change saved the company between 30 and 40 percent on its energy bills – or approximately more than $12,000 a year. This would be the equivalent of growing its sales by $155,000.