Green Supply Chain News: Walmart, Amazon, go Different Ways on Carbon Disclosure Project
Through a special arrangement, presented here for discussion is a summary of a current article from Green Supply Chain News, a sister publication of Supply Chain Digest.
The deadline for suppliers of large companies to submit answers to the Carbon Disclosure Project (CDP) was July 31. Now that answers have been submitted, it seems appropriate to look at the very different approaches taken to respond to CDP as well as how fierce competitors Walmart and Amazon.com are collaborating – or not – on the project.
The CDP Supply Chain process began with a partnership between CDP and Walmart in September 2007, when Walmart decided to use the CDP process to engage its supply chain to report on climate change-relevant information.
The world’s largest retailer requests that its 100,000 or so suppliers worldwide start reporting to the CDP as part of the Walmart’s Supplier Sustainability Assessment. Suppliers complete this assessment online and receive a score.
Questions from the CDP survey include the following:
- Is climate change integrated into your business strategy?
- Did you have an emissions reduction target that was active (ongoing or reached completion) in this report?
- Please provide details of your intensity target.
- Did you have emissions reduction initiatives that were active within the reporting year?
- Have you identified any climate change risks (current or future) that have the potential to generate a substantive change in your business operations, revenue, or expenditure?
- Please describe your gross combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unit currency total revenue.
CDP says that it appears twice as many Walmart suppliers are participating in the survey this year as they did in 2010, though it did not offer a specific number of respondents. The completion of the survey is voluntary, but Walmart has said in the past that a supplier’s greenhouse gas abatement strategies could someday affect its standing as a Walmart vendor.
Amazon.com, conversely, which may be Walmart’s most important competitor and has the second largest retail stock market cap globally next to Walmart, is resisting participation in the CDP.
Amazon regularly states its commitment to the environment, and notes for example it has been very involved in working with suppliers to improve package design, citing a case where it showed Philips/Norelco how to improve and reduce its packaging on some products sold through Amazon. Amazon, however, does not participate in the CDP, either for its own operations or for that of its suppliers.
The company believes sustainability issues are up to its customers and suppliers, and its website points to consumer behavior as evidence that e-commerce makes "greener lives" easier. It also believes that mitigating greenhouse gas emissions from its logistics partners is really a matter for carriers such as UPS and FedEx, not itself.
- Green Supply Chain News: Walmart, Amazon, go Different Ways on Carbon Disclosure Project – The Green Supply Chain
Discussion Questions: What are your perspectives on the different approaches from Walmart and Amazon to carbon disclosure efforts? Do you think large retailers should force suppliers into the CDP process?