Walmart Makes New Commitment to Advance Factory Energy Efficiency in China

28 Aug 2014 --- At the Walmart Supplier Summit in Shenzhen, Walmart announced a new commitment to further strengthen the sustainability of its global supply chain by advancing the energy efficiency of its China-based manufacturers. The commitment states that suppliers representing 70 percent of Walmart’s business sourced in China will be invited to participate in an energy efficiency program by the end of 2017.

As a result, Walmart forecasts significant potential savings over the next 3 years. An improvement in energy efficiency by 10 percent would translate to lowering greenhouse gas (GHG) emissions by more than 1 million metric tons; that is the equivalent of taking over 200,000 cars off the road for 1 year.

“We hope that today’s announcement will continue to pave the way for our operations to become more sustainable in China and globally, as well as continue to set the tone for the industry as a whole,” said Ignacio Lopez, Senior Vice President, who leads Walmart’s Global Sourcing Operations.

To date, 40 factories in China have participated in a 2014 pilot program, and approximately 500 factories will be invited to participate in the program by the end of 2017. In order to reach the 2017 goal set forth for China-based manufacturers, Walmart will assist in providing tools and resources that will help suppliers identify energy efficient projects tailored for each facility, coordinating relevant training when needed to overcome barriers with implementation. Walmart will also track overall project performance and impact.

“China is a key market for Walmart’s long-term sustainability strategy, and as a company, we’re focused on being part of a solution to help improve environmental issues facing the country,” said Sean Clarke, CEO of Walmart China. “Walmart has made significant progress in advancing factory efficiency in China in recent years, and today’s announcement is an expansion of our efforts to drive a larger impact.”

Walmart has a rich history of collaboration with key partners in China - including government representatives, local non-governmental organizations (NGOs) and suppliers – building on experience and lessons learned, to create new solutions and models for sustainable growth. As a result, the company’s operations and facilities in China have successfully reduced environmental impact while providing other benefits that translate into everyday low costs for customers.

Since 2008 Walmart has successfully implemented an energy efficiency program in its China facilities, resulting in a 20 percent energy reduction in 210 factories and $279 million savings in energy costs.

Additional recent milestones achieved in Walmart’s China operations include:
•    Investing in LED Technology: Over the past two years, Walmart has invested more than $16 million to add LED technology to China facilities, avoiding 33,000 tons of CO2 emissions. These use 35-50% less energy than conventional fluorescent light bulbs commonly used in the retail industry. .
•    Reducing Energy Consumption: Walmart recently retrofitted refrigerators at 250 its China stores with glass doors, reducing energy consumption by nearly 30 percent. In new stores, Walmart introduced next-generation refrigerators with glass doors, avoiding 30,000 tons of CO2 emissions.
•    Expanding The Sustainability Consortium: In 2012, Walmart announced a $2 million grant to launch The Sustainability Consortium (TSC) in China - an independent research organization that engages industries, universities and other experts from around the globe to develop measurement and reporting systems for product sustainability across consumer goods. The TSC also facilitates ongoing innovation, research and collaboration to continue to advance a green supply chain.
•    Increasing Use of Solar Energy: In 2011, Walmart completed the installation of a roof-mounted solar system at the Walmart Xiangmihu store in Shenzhen, which was the first non-state-owned solar power project under China’s Golden Sun Solar Program, as a result of generating 35,000 kWh monthly.

“Our ongoing collaboration with Walmart in improving energy efficiency has enabled CY TOP to not only reduce overall energy costs, but also boost the overall sustainability of our operations,” said James Han, CEO of CY TOP, a key Walmart supplier. “We look forward to taking our current facilities to the next level with Walmart’s newest program to increase energy efficiency among its China manufacturers.”

“Walmart’s continuous endeavor to help its suppliers improve their environmental and energy efficiency performance, is proved to benefit the suppliers, Walmart itself and more importantly, the environment,” said Jianyu Zhang, managing director, China program at Environmental Defense Fund. “This fits into the global trend of ‘greening’ the supply chain and could become an exemplary effort if all stakeholders are more closely involved.”