Summary: Walmart, a company with 10,000 stores, is getting its suppliers and their initiatives rated by certification agencies. The corporation is rewarding suppliers opting for Walmart sustainability programs with low-cost financial and early invoicing options, among others, to ensure its climate action goals are met.
We are living in a world of fast food and fast fashion. With the advent of eCommerce retail, hyper-connected customers have become more demanding looking for fast shipments, preferably same-day delivery. To feed this fast chain of product consumption, manufacturers and retailers adopt the quickest way to produce and deliver a cheap product. Unfortunately, the strategy to sell fast-moving consumer durables often comes at the cost of sustainable practices.
Walmart, a 500 USD billion global retail giant with more than 10,000 stores worldwide, decided to become sustainable in 2005. But Walmart sustainability is not just about taking measures to ensure the products, packaging, and processes of manufacturing are sustainable. It is about roping in suppliers in a shared endeavor and making it impactful.
A global supply chain will have a massive carbon footprint. Here are some of Walmart’s sustainability initiatives to become climate-neutral.
With a retail giant like Walmart, the opposite is true. Their customers look for the best deals, which often means products with slim margins that rely on the economics of scale for profitability. When most companies were looking at user-friendly innovations to go green, Walmart’s sustainability program was designed to be supplier-oriented. Here is how they are pushing their 100,000-strong supplier network to adopt sustainable and zero-waste practices.
Walmart has outlined six key areas where it wants its suppliers and business associates to reduce emissions. Suppliers signing up for Walmart’s sustainability efforts will have to go green in one or more of these areas: Energy consumption, impact on nature, waste disposal, product packaging, product use, and transportation.
As a part of Walmart’s sustainability measures, the corporation introduced a supply-chain finance program for its suppliers. Its business associates have to meet sustainability metrics while doing business. In return, Walmart offered early payment on their invoices at very low financing rates.
Walmart’s sustainability programs of its suppliers are validated by CDP, an environmental-reporting organization. It specializes in scoring a company’s progress against its environmental goals.
Suppliers opting for Walmart’s sustainability programs often need money to scale up operations while making their processes and products climate-neutral. Walmart introduces its suppliers, whose climate-change scores are validated for sustainable initiatives, to the best financing terms with its partner banks.
Walmart’s sustainability project ranks up suppliers for low-cost innovations in sustainable supply chain operations. Those who do it without altering product pricing are incentivized with better scores and deals.
The company is getting popular products such as coffee certified as sustainable by third-party accreditation. Suppliers opting for Walmart’s sustainability initiatives will have to get these products checked for environment-friendly certification before delivering them to the company outlets.
Where there is a will there's a way. This maxim stands true for Walmart. With a strategy directed at getting suppliers to switch to sustainable products and processes, the company is already making a change, one sale at a time. According to reports, more than 3,000 suppliers have signed on to Project Gigaton with 400 million metric tons of CO2 avoided over the last 5 years. The company also asked its suppliers to reduce the size of their packaging. Smaller packages meant fewer trucks for shipments. The company ended up saving $3.5m on its transportation costs. According to reports, 3 out of 10 Walmart stores have switched to renewable sources of energy.Key takeaways
Connect with us at Fashinza for climate-neutral procurement and production requirements.