12/08/2021 | Press release | Distributed by Public on 12/09/2021 03:39
BENTONVILLE, Ark., LONDON, HONG KONG, Dec. 8, 2021 - Walmart today raised the bar on climate action by creating a supply chain finance program that not only enables greenhouse gas (GHG) emissions reductions, but for the first time, uses science-based targets to do so in a way that aims for a 1.5-degree Celsius pathway.
Working alongside HSBC and CDP, the program will help Walmart's private brand suppliers - particularly small and medium-sized businesses - by introducing enhanced standards, tools and capacity building to help them upskill and in turn align their operations with transparent sustainability objectives.
The announcement marks a key next phase in Walmart's journey to avoid 1 billion metric tons (a gigaton) of greenhouse gas (GHG) emissions from its global supply chain by 2030. HSBC has been supportingWalmart's Sustainable Supply Chain Finance program (SSCF) since 2019 - encouraging its suppliers through improved financing access and terms if they reduce GHG emissions in at least one of the six pillars that are a part of Project Gigaton™.
"Our work with Project Gigaton™ is purposefully meant to encourage all Walmart suppliers to pursue emission reduction goals across six pillars: Energy, Nature, Waste, Packaging, Transportation and Product Use & Design. That includes creating programs such as the Sustainable Supply Chain Finance program with HSBC so that smaller and medium-sized businesses can also take advantage of special financing to make the necessary investments in their sustainability journeys. Now with CDP scoring added to the mix, the program provides suppliers with one more way to take advantage of improved financing through progress and disclosure - and exemplifies how we approach sustainability through a shared value lens," said Jane Ewing, the Senior Vice President for Sustainability at Walmart.
"On average, 80% of a company's carbon footprint resides in its supply chain, which means delivering on Scope 3 emissions won't happen unless more is done to help small- and medium-sized suppliers. This program does just that and accelerates net zero transition," said Surath Sengupta, Global Head of Financial institutions, Portfolio Management and Sustainability, Global Trade and Receivables Finance at HSBC.
Since 2017, more than 3,100 suppliers have formally signed on to Project Gigaton™ with suppliers reporting more than 186 million metric tons (MMT) of CO2e avoided in 2020, for a cumulative total of more than 416 MMT of CO2e avoided. However, recent research from HSBC and Boston Consulting Group (BCG) highlighted that small- and medium-sized businessesdon't have the in-house climate expertiseand have limited access to capital to drive and fund climate transformation. The research found that large corporations should supplement new standards with efforts to co-invest and provide liquidity through supply chain finance, share transition knowledge and resources, and help propagate innovation and technologies.
"Raising ambitions to reduce Scope 3 emissions is paramount in reaching the Paris Agreement goal, and this is only achievable with strong supply chain engagement. CDP's work with suppliers has helped reduce GHG emissions by 619 million metric tons in 2020 alone, and we are pleased to deepen our relationship with Walmart and HSBC in providing the support needed to accelerate supply chain action through multi-stakeholder engagement,"saidDexter Galvin, Global Director of Corporates & Supply Chains at CDP.
The Sustainable Supply Chain Finance program
Suppliers taking part in Project Gigaton™ now have the option for setting science-based targets and having their targets validated by the Science Based Targets Initiative (SBTI), or achieving certain score thresholds on their CDP climate change reports.
Eligible suppliers can approach HSBC for early payment on their invoices approved by Walmart with pricing on the financing linked to the supplier's CDP scores, targets set and impact reported. Suppliers setting the highest ambition would be able to take advantage of receiving the lowest pricing. The partnership with HSBC helps Walmart address its Scope 3 emissions and supports its suppliers to reduce their Scope 1 & 2 emissions. Suppliers can also use the financing proceeds to manage their own working capital and their sustainability-linked improvements, such as making their operations energy efficient to deliver against Walmart's Project Gigaton™ goals.
"We are seeing more suppliers enrolling in Project Gigaton™ since the launch of the Sustainable Supply Chain Finance program two years ago. Our suppliers tell us that the incentives from the program are helping them invest in carbon emissions reduction efforts across their operations - this is why these types of collaborations are critical in ensuring even small- and medium-size businesses can reduce their emissions efficiently," said Ash Eisa, Senior Vice President for Global Sourcing at Walmart.
Walmart Inc. (NYSE: WMT) helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, approximately 220 million customers and members visit approximately 10,500 stores and clubs under 48 banners in 24 countries and eCommerce websites. With fiscal year 2021 revenue of $559 billion, Walmart employs 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting corporate.walmart.com, on Facebook at facebook.com/walmartand on Twitter at twitter.com/walmart.
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,969bn at 30 September 2021, HSBC is one of the world's largest banking and financial services organizations.
CDP is a global non-profit that runs the world's environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 590 investors with over $110 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 14,000 organizations around the world disclosed data through CDP in 2021, including more than 13,000 companies worth over 64% of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.netor follow us @CDP to find out more.