Even Walmart struggles to monitor its supply chain emissions

 Our Co-Founder, Justin Steinberg response to Andrew Edgecliffe-Johnson’s excellent profile on Walmart’s ESG efforts.


Accounting for supply chain emissions is enormously complex, and Walmart has made great strides, but we should not confuse efforts to improve supply chain emissions with verifiable reductions.


Financial Times

Letter: Even Walmart struggles to monitor its supply chain emissions

Oct 28, 2022


Andrew Edgecliffe-Johnson paints a vivid picture of Walmart’s successful navigation of the increasingly treacherous waters of environmental, social and governance investing (Spectrum, October 15).

But lost among the anecdotes about sustainable tuna are some important clarifications regarding Walmart’s most celebrated sustainability goal, Project Gigaton.


The article leaves the impression that Walmart will reduce greenhouse gas emissions in its supply chain by 1bn metric tonnes (a gigatonne) by 2030. However, that is neither what the company says nor is there evidence that this is what they are doing.


Project Gigaton is an aspirational goal to reduce or avoid a gigatonne of emissions. Avoided emissions is a complicated concept without an accepted definition. It refers to the emissions that would have been created in a business-as-usual scenario but were not, thanks to efficiency efforts (eg the use of high-efficiency lights or machinery).


Practically, this means Walmart’s suppliers could continue to increase their emissions while they count the theoretical business-as-usual emissions as a reduction.


Whether or not this is occurring is impossible to know because the underlying data are impenetrable. As Walmart warned in its response to the Securities and Exchange Commission’s proposed requirements on emissions disclosure, calculating emissions like those in its supply chain is an unreliable exercise that “involves estimations on top of assumptions that are repeatedly layered to arrive at a falsely precise number.”


What we do know is that Project Gigaton represents tangible, industry-leading efforts to improve the emissions’ trajectory of Walmart’s supply chain. However, this should not be confused with a verifiable reduction in supply chain emissions.


Justin Steinberg
Co-Founder, Finance Lead, Sargasso Environmental Insights, New York, NY, US


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