Walmart Sets Science-based Targets for Suppliers - Smart Energy Decisions

Commercial, Energy Efficiency, GHG Emissions  -  December 8, 2021

Walmart Sets Science-based Targets for Suppliers

Walmart announced the creation of a supply chain finance program that will lower GHG emissions reductions through CDP’s TCFD-aligned disclosures, but uses science-based targets for the first time to reach the goal of a 1.5-degree Celsius pathway.

The first financing program will use the Science Based Targets initiative (SBTi) to enable Walmart’s private brand suppliers by introducing enhanced standards, tools and capacity building to help them upskill and in turn align their operations with transparent sustainability objectives. The project includes data from CDP, a non-profit that operates an environmental disclosure system for companies, cities, states and regions, and is supported by HSBC.

This strategy is the next phase in Walmart’s plan to avoid one billion metric tons of GHG emissions from its global supply chain by 2030. HSBC has supported Walmart’s Sustainable Supply Chain Finance program (SSCF) since 2019 by encouraging its suppliers through improved financing rates if they reduce GHG emissions in at least one of the six pillars that are a part of Project Gigaton™.

Since 2017, over 3,100 suppliers have signed on to Project Gigaton™ with suppliers reporting more than 186 million metric tons of CO2e avoided in 2020, for a cumulative total of more than 416 MMT of CO2e avoided. 

“Our work with Project Gigaton™ is purposefully meant to encourage all Walmart suppliers to pursue emission reduction goals across six pillars: energy, nature, waste, packaging, transportation and product use and design,” said Jane Ewing, SVP for Sustainability at Walmart in a statement. “That includes creating programs such the Sustainable Supply Chain Finance with HSBC so that smaller and medium sized businesses can also take advantage of special financing to make the necessary investments in their sustainability journeys. Now with CDP scoring added to the mix, the program provides suppliers with one more way to take advantage of lower priced financing through progress and disclosure – and exemplifies how we approach sustainability through a shared value lens.”

Eligible suppliers can approach HSBC for early payment on their invoices approved by Walmart with pricing on the financing linked to the supplier’s CDP scores, targets set, and impact reported. Suppliers setting the highest ambition would be able to take advantage of receiving the lowest pricing. The partnership with HSBC helps Walmart address its Scope 3 emissions and supports its suppliers to reduce their Scope 1 and 2 emissions. Suppliers can also use the financing proceeds to manage their own working capital and their sustainability-linked improvements to deliver against Walmart’s Project GigatonTM goals.

 

 

Keywords: HSBC, Walmart

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