Walmart wants suppliers to collectively buy renewable energy


London – When Hurricane Katrina devastated New Orleans in 2005, it proved to be a challenging point for Walmart, the world’s largest retailer.

According to CEO Doug McMillan, the business was doing well at the time, but in a broader environment the focus was on customers and employees. “We were a big company, but did not fully understand what was meant or what was necessary for us socially and environmentally, addressing the Climate Week NYC conference in an online broadcast last month.”

“We decided to step up,” McMillan said. “We committed our company to achieving 100% renewable energy, a zero-waste strategy, a more sustainable supply chain and a minimum wage increase,” he explained.

Fast forward to 2020, and Walmart now plans to become a “regenerative” company, it was also announced at the climate conference. Its environmental goals focus on decarbonization – where it aims to emit zero carbon by 2040 – and “protect, manage or restore one million square miles of ocean and 50 million acres of land by 2030, to revitalize the natural world. “With a pledge to do. It also plans to achieve zero waste in its own operations by 2025 in the US, Canada, Japan and the UK.

But as with other companies, Walmart’s great impact on the environment comes through its suppliers and how shoppers use their products, its chief sustainability officer Kathleen McLaughlin pointed out. “For sustainability, we are essentially trying to change the way that consumer supply chains function from source to consumer and end of life,” she told CNBC by phone.

A Walmart in Massachusetts uses a wind turbine in its parking lot to provide energy for the store.

Walmart

Renewable energy sources will be a major contributor to reducing their greenhouse gas emissions, and Walmart intends to use 100% solar, wind and other green technologies in its own operations by 2035 – currently, renewable energy is around 29% . Its Energy Sources. Much of this will come from power purchase agreements (PPAs), where the retailer signs long-term deals to buy green energy from suppliers, a practice that has helped it to contract 1.2 GW of renewable energy in 2018 and 2019. The solar industry in the US installed 3.62 gigawatts of photovoltaic capacity in the first quarter of this year.

Walmart aims to reduce emissions from its supply chain to 1 gigatonne by 2030 through its Project Gigaton initiative, and is now expanding its purchasing power to its suppliers through its Gigaton PPA program launched Will be able to group together to buy renewable energy from. in September. According to Walmart’s calculations and data for renewable energy buyers, small companies can be priced out of the market to buy renewable energy this way, and only 100 corporates are that way.

“We launched (Gigatan PPA) because of interest from suppliers, and just hear them say ‘Oh, we wish we could do more in renovation, it’s harder for us, we don’t have a procurement team, we Don “know how to go about it,” McLaughlin told CNBC.

He said, “It really fits with our whole philosophy and approach with Project Gigatan, which is to encourage a higher ambition, and to provide access to the practical chain from faster and more influential suppliers to the supply chain.” Affects decarbonizing. ” As suppliers get on board, Walmart will report how much energy is purchased through the Gigaton PPA.

It is not just the help of retail giants that help small businesses obtain renewable energy – companies that collectively help home users buy green electricity are springing up. Britain-based Ripple Energy, for example, allows people to buy shares in a cooperative that is building the Grig Fataha wind farm in Wales, which will then supply electricity to homes.

Palm Springs, California

Murat Tanner | Photographer’s Choice | Getty Images

It is part of a database of sustainable start-ups put together by venture firm Rainmaking to help reach the United Nations’ sustainable development goals by 2030, according to Alex Farset, a partner at Alex Farset, and a partner here According to, represents an investment company towards the energy being supplied by a fleet of small providers. “The next decade will see a fundamental change in the way energy is produced and consumed,” he told CNBC via email.

He added, “Suppliers will no longer have a monopoly in the market. As the cost of renewable energy continues to decline dramatically, like solar, we will see a major increase in community energy and ‘micro generation’.”

For Walmart, it would like to see more favorable policies in support of renewable energy purchases. “We helped shape and are supportive of the principles of Renewable Energy Buyers (Alliance) and unlock policy rules in so many jurisdictions (ie) that are going to be more favorable for renewables, or at least a level , Regulators, energy market operators, trade organizations … and we would love to see more of this.

Walmart has publicly expressed disappointment with President Donald Trump’s decision to exclude the US from the Paris Agreement, and McLaughlin reiterated his position. “We think America should stay in the Paris Agreement. And we have said that at the time and still believe that … climate change is one of the biggest crises facing us as a planet … And unfortunately, all of this requires immediate action. To address. So we need global collective action on this. “

  • CNBC’s Anmar Fraengel contributed to this report.
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