As pressure mounts from stakeholders and regulators, Walmart is one of a growing list of major companies aiming to slash carbon emissions in their supply chains.
The European Union's adoption of a new framework requires businesses, starting in 2024, to report not just on carbon emissions but also on other sustainability initiatives. Meanwhile, the U.S. Securities and Exchange Commission and states like California are developing similar mandates.
With mandatory carbon emission and climate risk reporting pending, Walmart has set goals to decarbonize its operations and expand access to clean energy for customers and suppliers by 2040, said Vishal Kapadia, Walmart's senior vice president for energy transformation. Kapadia spoke during MIT Technology Review's ClimateTech event on Thursday.
Kapadia said Walmart's goals include deploying electric vehicle charging stations for its customer vehicles around the U.S.; adding more onsite renewable energy sources, such as solar panels to facilities; and assessing future fuel options for transportation fleets beyond traditional fossil fuels.
However, identifying Scope 1, 2 and 3 emissions and collecting that data from businesses throughout a supply chain, as will be mandated in carbon emissions reporting requirements, will pose challenges to businesses going forward -- something Walmart is already running into trouble with. Scope 1 emissions are those directly produced by a business, while Scope 2 are indirect emissions caused by the purchase of electricity. Scope 3 emissions are produced indirectly through businesses in a company's supply chain or through other means such as employee travel.
"When you think about Scope 1 and 2 in an organization of our scale, it's quite a task," Kapadia said. "We consumed as much electricity last year as some small countries."
Identifying and measuring carbon emissions
Walmart works with climate technology startup Watershed, which has developed a platform to measure and report carbon emissions and identify ways to reduce emissions. Companies such as ServiceNow, Okta, DoorDash and AirBnB also use the Watershed platform.
Steve DavisHead of climate science, Watershed
For many companies, Scope 3 emissions are dominant, said Steve Davis, head of climate science at Watershed and a professor of earth system science at the University of California, Irvine.
"Scope 3 are emissions that happen upstream in a company's supply chain or downstream during the use and disposal phase of a product," Davis said during MIT's ClimateTech event. "It's a perennial challenge for carbon accounting, as these companies may not have a lot of insight into their emissions."
Davis said one way Watershed addresses the challenge is by scraping publicly available data on supply chain companies and their emissions.
"If our customers use those companies, we can incorporate supplier-specific information in their footprints," Davis said. "The other way is to use software to directly engage the supplier. We've sent out surveys that are meant to help our own customers gather this supplier-specific data."
Davis said as carbon emissions reporting becomes mandatory for businesses, getting accurate data will become critical.
"What this means for us is that the bar for what's good in the corporate climate reporting space is shifting from whether you even measure your carbon footprint to how well you actually measure that," he said.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
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