Supply Chain

CDP / Wal-Mart Supply Chain Work

In September 2007 CDP announced a partnership with Wal-Mart to work together to help measure Wal-Mart's emissions throughout their supply chain. Wal-Mart decided to use the CDP process to engage the companies in their supply chain to report climate change-relevant information, such as greenhouse gas emissions data, emissions reduction targets and climate change strategy. This pilot, which ran through 2007, incorporated seven of Wal-Mart supplier sectors, including DVDs, toothpaste, soap, beer, milk, vacuum cleaners and soda product categories. These sectors were selected for their common usage and level of supplier engagement.

Wal-Mart recognised the benefits of the CDP process in 2006, on completing the questionnaire for the first time. Jim Stanway, Wal-Mart's Director, Project Development said: "Over the past two years, Wal-Mart has gained a new appreciation of the CDP process and decided to file its CDP2006 submission. This process provided the company with valuable insight, including data showing the refrigerants used in grocery stores made up a larger percentage of the company's greenhouse gas footprint than its truck fleet. Although a significant effort is focused on trucks to improve their fuel efficiency, this new insight is focusing Wal-Mart on the potential of reducing its refrigerant footprint".

Wal-Mart's supply chain network consists of more than 60,000 suppliers across hundreds of sectors and the global retailer is the first corporation to work with the CDP process to help establish an emissions strategy for the entirety of its supply chain. This project shows the increasing focus on measuring not only a company's own emissions, but also their supply chain emission too, where, for many sectors, the majority of greenhouse gas emissions are generated.

CDP and Wal-Mart are currently evaluating the pilot and preparing for the next phase of supply chain carbon disclosure strategy to incorporate more product categories.

It's not just the procuring organisations asking the questions who benefit, it's also the suppliers, because the process of asking the right questions is actually leading to change. It engages suppliers, often for the first time, on issues relating to climate change and begins the journey of understanding and addressing the climate change implications to their business. Some of the suppliers working within the CDP system have already identified areas where emissions cuts can be made. Areas such the manufacture of packaging has seen suppliers moving to more energy efficient systems.

Oakhurst Dairy is one of Wal-Mart's milk suppliers, based in the USA and representing Northern New England's largest dairy company. John Fleming, Chief Merchandising Officer of Wal-Mart said at the CDP launch in 2007 that Oakhurst's decision to participate as a supplier was driven by "their desire to help customers by improving efficiencies and driving down costs. Furthermore the dairy company not only examined in-house emissions but have also looked into their own supply chain and related carbon footprints. This succession of analysis of supply chain systems signifies the formation of a unified business response to climate change engaging all stages of production."