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Wal-Mart: “We see ourselves as an aggregator of carbon”

I am currently attending the Corporate Climate Response conference in NYC (carbon-balanced flying courtesy of Expedia). The following is a recap of a talk by Jim Stanway, Wal-Mart’s Director of Project Development and leader of Wal-Mart’s Global Greenhouse Gas Strategy team.

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Your partner in lowering carbon?

Against the backdrop of a humorous mockup of a Wal-Mart price notice announcing “rolling back of CO2,” Jim Stanway told the audience he believes high energy prices did more to damage Wal-Mart’s results this year than competition from Target and Sears combined.

Stanway believes Wal-Mart has a key role to play in the carbon markets. The story Jim tells is quite interesting and shows a promising pathway for one of the most unlikely candidates for leading the corporate response on climate change. What started as a defensive regulatory initiative has turned into a lofty set of goals, sixteen working groups, three major environmental initivatives, and a sense of optimism and opportunity around climate change.

A key to Wal-Mart’s success has always been an ability to use its vast scale to drive efficiencies througout the entire supply chain, and the same dynamic is now playing out on the energy realm. Just one example: an internal Wal-Mart lighting team went to a supplier and quickly executed an efficiency plan that cut the suppliers’ utility bill by a whopping 60%.

Everyone benefits in this scenario, as the high cost of energy is felt by suppliers, Wal-Mart employees, and customers. And, of course, the environmental benefits of this enlightened self-interest are hardly incidental.

Wal-Mart’s carbon footprint is 19.8 million metric tons. Stanway estimates the carbon footprint of Wal-Mart’s supply chain at about 200 million metric tons, “a much bigger pool to go fishing in.” Zoom out a step further to Wal-Mart’s 13 million daily customers and even the supply chain number seems paltry.

While it’s not clear how exactly retail chains such as Wal-Mart fit into today’s carbon marketplace, Stanway says the company nevertheless sees itself as “an aggregator of carbon.” The first step in Wal-Mart’s carbon strategy is quite simple and involves partnerships with energy management companies to elevate energy (and therefore carbon) management practices in suppliers. On the consumer side, a major push on compact fluorescent lightbulbs is underway, with a program in the works to jumpstart word-of-mouth marketing by encouraging CFL adoption in 1.3 million associates.

Is Wal-Mart perfect? No, but this morning’s talk gave us great hope for the future.

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