Dive Brief:
- Walmart announced Wednesday it has added science-based targets to its supply chain finance program, with the aim of helping smaller and mid-size companies make their operations more sustainable.
- Walmart worked with HSBC and CDP, a nonprofit that helps companies and cities with their environmental impact disclosures, on changes that provide smaller suppliers access to special financing for their sustainability efforts.
- Walmart said the new finance program for suppliers marks a “key” step in its efforts, called Project Gigaton, to cut 1 gigaton of greenhouse gas emissions from its global supply chain by 2030.
Dive Insight:
In its announcement, Walmart noted new research from HSBC and the Boston Consulting Group, which found that as much as half of the $100 trillion of investment by 2050 to achieve net-zero across global supply chains needs to come from small and mid-sized businesses. But those businesses often don’t have the in-house climate expertise and access to capital to tackle sustainability goals, the report noted.
Walmart is taking the cue from the research findings that larger corporations need to “provide liquidity and share knowledge and resources with smaller businesses.”
To get access to the retailer’s Sustainable Supply Chain Finance program, suppliers have two options. They can set science-based targets that will get validated by the Science Based Targets Initiative, a joint venture between CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature aimed at improving companies’ work to reduce greenhouse gas emissions. Or, they can meet certain score thresholds on their CDP climate change reports.
Financing for eligible suppliers with Walmart-approved invoices is linked to their CDP scores, targets and reported impacts, with lower pricing linked to more ambitious efforts, per the announcement.
Walmart has been working with HSBC since 2019 on the retailer’s Sustainable Supply Chain Finance program. The banking and financial services institution is incentivizing suppliers to reduce their greenhouse gas emissions in at least one of Project Gigaton’s six areas — energy, waste, nature, packaging, transportation, and product use and design — for improved financing.
“Now with CDP scoring added to the mix, the program provides suppliers with one more way to take advantage of improved financing through progress and disclosure,” Jane Ewing, Walmart’s senior vice president for sustainability, said in the announcement.
More than 3,100 suppliers have signed on to Project Gigaton since 2017, and last year, they reported avoiding more 186 million metric tons of greenhouse gas emissions, Walmart said.
The financing program announcement is the latest one by Walmart to advance its sustainability goals. In recent months, the retailer has rolled out an online shopping destination to help customers find brands and products aligned with healthy food, clean living or sustainability goals. It has also announced tests of sustainable bags.
The retailer is targeting zero emissions across its global operations by 2040 and, by 2030, aims to manage or restore at least 50 million acres of land and one million square miles of ocean.
