In yet another initiative to adopt sustainable practices, Wal-Mart recently announced it wants its suppliers to reduce greenhouse gas emissions by 20 million metric tons by the end of 2015. The latest move is part of the retail giant’s broader, ambitious environmental goals.

Any major initiative Wal-Mart undertakes has enormous supply chain implications worldwide. The company is estimated to be the largest private user of electricity in the United States, buys the most cotton, sells the most milk and employs 1.4 million workers in the U.S.

So the announcement last fall of the company’s plan to develop a sustainable product index, which will establish a single source of data for evaluating the sustainability of products, was widely considered a game-changer.

In late February, however, the retail behemoth upped the ante when it unveiled its plan to cut 20 million metric tons of greenhouse gas (GHG) emissions from its global supply chain by the end of 2015. “This represents one-and-a-half times the company’s estimated global carbon footprint growth over the next five years and is the equivalent of taking more than 3.8 million cars off the road for a year,” the company said in a statement.

“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,” the New York Times notes. “Essentially, suppliers are being asked to examine the carbon life-cycle of their products, from the raw materials used in manufacturing all the way through to the recycling phase.

“Already, Wal-Mart is working to change the labels on clothing it sells to indicate the products can be washed in cold water (therefore lowering customers’ electricity bills), and to sell private label compact fluorescent light bulbs in Mexico,” the Times reports.

To meet its latest goal, Wal-Mart has collaborated with the Environmental Defense Fund (one of the organizations behind the company’s Sustainability Index) and will work with other external advisers to identify projects, quantify reductions, engage suppliers and ensure proper procedures are followed for each GHG reduction claim. Although Wal-Mart said supplier participation in its latest effort would not be mandatory, the retail giant made it clear that it was interested in doing business only with suppliers that share its goals.

The company — which operates more than 8,000 Wal-Marts, Sam’s Clubs and other outlets in 15 countries — has more than 100,000 suppliers with a combined footprint that is much larger than the company’s operational carbon footprint alone.

To achieve the latest reduction goal, Wal-Mart and its collaborators will focus on three primary components to cut emissions:

1. Selection — a focus on products with the highest life-cycle amount of carbon emissions;
2. Action — products wherein greenhouse gases can be cut from sourcing of raw materials, manufacturing, transportation, customer use or end-of-life disposal; and
3. Assessment — quality assurance reviews by ClearCarbon and PricewaterhouseCoopers.

How will Wal-Mart’s carbon reduction plan work? The EDF’s Innovation Exchange Blog offers some past examples of “simple” changes.

For instance, a couple of years ago Wal-Mart asked one of its DVD suppliers to take part in a pilot project, in which the supplier made changes to lighten DVD packaging in weight, thereby cutting energy use by 28 percent and reducing the life-cycle carbon emissions of DVDs sold to Wal-Mart by about 25,000 tons. Further, it had a sizable multiplier effect, as the lighter packages were also used on DVDs sold at other stores. The change then extended from movies to video games and software.

In another pilot project, Wal-Mart turned its attention to milk. “At Walmart’s request, several dairy suppliers analyzed the costs and emissions associated with a gallon of milk, from dairy farm to distribution center,” the EDF blog says. “By gathering and looking at the data, we found many opportunities to reduce emissions — at farms through changes in fertilizer and manure management, at dairy-processing facilities through improved energy efficiency and even in the product itself, such as making milk shelf-stable.”

The retail giant’s latest move is “part of broader goals Wal-Mart has outlined to one day use only renewable energy and create zero waste,” Reuters reports.

Wal-Mart’s long-term environmental goals are ambitious:

• To be 100 percent supplied by renewable energy;
• To create zero waste; and
• To sell products that sustain people and the environment.

The company’s efforts in recent years to adopt sustainable practices is more about the bottom line than it is about image, Chairman Lee Scott said at a business conference earlier this month. There, Scott indicated that if the efforts had been solely about brand enhancement, the environmental initiatives surely would been scaled back during the downturn, CNET reports.

“What Wal-Mart has done is approach this from a business standpoint and not from a point of altruism,” Scott said at the conference. “If we as a company focus on waste, we can make Wal-Mart a better company and at the same time, become a better citizen.”

Earlier

Weekly Industry Crib Sheet: Wal-Mart’s New Game-Changing Mandate…

Wal-mart ‘Sustainable Value’ Powwow Flexes ‘Green’ Muscle

Resources

Walmart Announces Goal to Eliminate 20 Million Metric Tons of Greenhouse Gas Emissions from Global Supply Chain
Wal-Mart Stores, Inc., Feb. 25, 2010

Wal-Mart’s Chairman Pulls a Long Supply Chain Toward Sustainability
by Colin Sullivan
ClimateWire, April 14, 2010

Wal-Mart Unveils Plan to Make Supply Chain Greener
by Stephanie Rosenbloom
The New York Times, Feb. 25, 2010

Walmart and Global Warming
Environmental Defense Fund, Feb. 25, 2010

Why Walmart’s Carbon Commitment Can Make Such a Difference
by Elizabeth Sturcken
EDF Innovation Exchange Blog, Feb. 25, 2010

11 Ways That Walmart Is Changing Retail – for Good
by Ariel Schwartz
Fast Company, Jan. 26, 2010

Wal-Mart to Cut Emissions from Supply Chain
by Nicole Maestri
Reuters, Feb. 25, 2010

Wal-Mart Chairman: Go Green for Money, Not Image
b Martin LaMonica
CNET News, April 12, 2010