How Walmart is Cutting Carbon Emissions and Holding Suppliers to High Standards

Walmart, one of the world’s largest retailers, is taking big steps to improve its supply chain sustainability and reduce carbon emissions. But it's not just about cutting down on emissions — it’s about setting high standards for its suppliers and ensuring that environmental responsibility and ethical practices are part of the game plan.

In this article, we’ll explore how Walmart is reducing its carbon footprint by improving supply chain processes and the rigorous factory inspection standards it uses to keep its suppliers in check.

Reducing Carbon Emissions Through Supply Chain Innovation

Walmart is one of the top global companies working to reduce its environmental impact. According to Supply Chain Brain, Walmart has successfully reduced 230 million metric tons of greenhouse gas emissions in just three years. This is part of the company's long-term plan to cut emissions and work toward achieving zero emissions across Walmart's global operations by 2040.

Walmart released 18 million metric tons of greenhouse gases in 2018 across its own operations. So, if Walmart is serious about achieving its sustainability goals, it needs to make sure its suppliers step up their game too.

Key Steps Walmart is Taking to Reduce Emissions

Encouraging Clean Energy and Sustainable Practices

Walmart has made it clear that its suppliers must rethink their practices to meet sustainability standards. That includes adopting more clean energy and using more environmentally friendly designs for products and packaging. By partnering with suppliers who share the same values, Walmart is pushing the entire supply chain to make greener choices.

Reducing Emissions in Logistics

Walmart has focused on decarbonizing its logistics operations. This means using fuel-efficient trucks, cutting down on refrigerant use, and choosing sustainable packaging. Between 2015 and 2018, these efforts helped reduce Walmart’s carbon emissions by 7.7%. While this number doesn’t include the emissions from suppliers, it’s still a big win for the company.

Renewable Energy in Operations

One of the most important ways Walmart is reducing its carbon footprint is by switching to renewable energy. As of now, about 29% of Walmart’s electricity comes from renewable sources, but the company is working to increase this to 50% by 2030. This shift is not just about reducing Walmart's emissions but also setting an example for its suppliers to follow.

Promoting Circular Economy Practices

Walmart is also exploring ways to implement circular economy principles across its operations. This includes reducing packaging waste and encouraging recycling. Through initiatives like reusable bags, Walmart helps reduce plastic waste and promotes more sustainable consumption.

In short, Walmart is driving change across its supply chain, working with suppliers to reduce carbon emissions and ensure that sustainability is a key part of their operations.

Walmart’s Factory Inspection Standards as a Core Management Principle

Walmart’s supply chain doesn’t just focus on carbon emissions — it also places a strong emphasis on ethical practices and social responsibility. To ensure that its suppliers are meeting these standards, Walmart has a comprehensive factory inspection system. These inspections check whether factories are meeting Walmart’s Standards for Suppliers Manual, which covers everything from product quality to labor practices and environmental impact.

Key Categories of Walmart’s Factory Inspections

Walmart has three main audit categories that factories must pass to become part of Walmart's supply chain. These are:

Factory Capability & Capacity Audit (FCCA)

Before a factory can become a Walmart supplier, it must prove that it has the capacity to produce goods in high volumes and meet tight deadlines. The FCCA audit checks if the factory has the right production capabilities, including enough workers and equipment to produce goods safely and according to Walmart’s quality standards.

Supply Chain Security (SCS)

Following the 9/11 attacks, the C-TPAT (Customs-Trade Partnership Against Terrorism) program was introduced to improve supply chain security. Walmart adopted the SCS audit to ensure that factories meet the highest standards of security and safety in their operations. This includes checks on security protocols, such as access control and surveillance measures.

If a factory has already passed C-TPAT or other international security certifications like SCAN or GSV, Walmart will accept these certifications instead of requiring additional audits.

Ethical Standards (ES)

One of the most important aspects of Walmart’s factory inspection process is ensuring that suppliers follow ethical labor practices. The ES audit checks for things like child labor, forced labor, excessive overtime, and unsafe working conditions. Walmart wants to make sure that its suppliers are treating workers fairly and following laws about wages, working hours, and safety.

Walmart accepts audits from several other organizations, such as SMETA, BSCI, and WRAP, as long as the reports are less than a year old.

Why These Audits Matter

Walmart’s factory inspection standards help ensure that the company’s suppliers meet high ethical and environmental standards. By requiring suppliers to pass these audits, Walmart makes sure that its supply chain is secure, responsible, and sustainable.

For factories, passing these audits is a must to continue working with Walmart. If they don’t meet Walmart’s standards, they can’t supply products to the company.

Conclusion: Walmart’s Impact on Supply Chain Sustainability and Ethics

Walmart is using its massive influence to create a more sustainable and ethical supply chain. By focusing on reducing carbon emissions through logistics improvements, renewable energy, and circular economy practices, Walmart is taking real steps toward environmental responsibility.

At the same time, Walmart’s rigorous factory inspection standards ensure that suppliers meet ethical labor practices and adhere to high security and quality standards. By making these audits a key part of its supplier onboarding process, Walmart ensures that its supply chain operates smoothly and responsibly.

If you’re a supplier looking to work with Walmart, it’s essential to understand these standards and prepare for factory inspections. Whether it’s improving your environmental practices or ensuring compliance with labor laws, following Walmart’s guidelines will help your business grow in a sustainable, ethical way.