Wal-Mart to Green Up Supply Chain

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Walmart

The nations largest retailer, Wal-Mart announced this week it would cut some 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015 – the equivalent of removing more than 3.8 million cars from the road for a year.

The company plans to achieve that goal by focusing on popular product categories with the highest embedded carbon – milk, bread, meat, clothing – and by pressing its suppliers to rethink how they source, manufacture, package and transport those goods.

Essentially, suppliers are being asked to examine the carbon lifecycle of their products, from the raw materials used in manufacturing all the way through to the recycling phase.

Jim Stanway, who oversees Wal-Mart’s supplier initiatives involving energy said earlier this week that suppliers would be willing to spend money if “it’s an investment where everybody’s sure it makes the supplier more profitable.”

And while the initiative may be good for the environment, it may also be good for Wal-Mart. Driving costs out of the supply chain could result in savings for Wal-Mart that can be passed along to consumers – enabling the company to uphold its reputation as a destination for rock bottom prices.

Wal-Mart said supplier participation in its effort to reduce greenhouse gas emissions would not be mandatory, But the giant retailer – with sales of more than $400 billion last year – made it clear that it was interested in doing business only with suppliers that share its goals.