Walmart Supplier GHG
Innovation Program:
Guidance Document
Version 1.0
August 3, 2010
This document summarizes the Walmart supplier GHG reduction goal and the guidance to
submitting projects to contribute to this goal. For questions about this document, please contact
James Stanway: James.Stanway@wal-mart.com or (479) 204-0334.
Contents Contents ....................................................................................................................................................... i Acknowledgements.................................................................................................................................... 1 Part 1: The Program .................................................................................................................................. 4 Walmart’s Impact on the Environment ................................................................................................ 4 Walmart’s Supplier GHG Reduction Goal .......................................................................................... 5 Selection of Projects .............................................................................................................................. 5 Project Teams......................................................................................................................................... 7 Carbon Reduction Claims ..................................................................................................................... 9 Assessing Claims ................................................................................................................................. 10 Program Timeline ................................................................................................................................. 10 Unintended Consequences ................................................................................................................ 11 Part 2: Project Accounting Guidance .................................................................................................... 11 Qualification of Emissions Reduction Projects ................................................................................ 11 Types of Projects that Qualify ........................................................................................................ 11 Qualification Criteria............................................................................................................................. 12 Timing ................................................................................................................................................ 12 Additionality ....................................................................................................................................... 14 Beyond BAU...................................................................................................................................... 14 Quantification of Emissions Reduction Projects.............................................................................. 15 Uncertainty ........................................................................................................................................ 15 Product Quantification (Track 1) .................................................................................................... 15 Facility/Process Quantification (Track 2) ...................................................................................... 22 Financial Values of Projects ............................................................................................................... 24 Part 3: Submission How-To .................................................................................................................... 25 General Questions ............................................................................................................................... 25 Who Submits the Documentation? ................................................................................................ 25 How Do I Submit A Project? ........................................................................................................... 25 Qualification........................................................................................................................................... 25 If my project does not fit the two tracks, does it qualify?............................................................ 25 Does a Walmart store reduction count? ....................................................................................... 25 Does a reduction at a Sam’s Club or an international store count? ......................................... 25 Page i
What are the dates for a project to “count” toward the goal? .................................................... 25 What does it mean to “start” a project?......................................................................................... 26 Would a project that focuses on reductions from consumers (Walmart customers) count? 26 (Track 1) Product Quantification ....................................................................................................... 26 How do I select a methodology?.................................................................................................... 26 What do I need to include in my methodology documentation? ............................................... 26 What is a Product Life Cycle Assessment? ................................................................................. 27 How do I determine boundary conditions?................................................................................... 27 How do I account for loss rates?.................................................................................................... 28 (Track 2) Facility/Process Quantification......................................................................................... 28 What is the “type of footprint?” ....................................................................................................... 28 What methodology should I follow for facilities or processes?.................................................. 28 What are the boundaries to consider in a facility/process quantification calculation?........... 28 Why do I need to show the baseline calculation per emission source? .................................. 29 Part 4: Post-Submission.......................................................................................................................... 30 Step 1. Project Application Package Submitted ............................................................................. 30 Step 2. Package Stored in Database............................................................................................... 30 Step 3. Quality Assurance (QA) of Application............................................................................... 30 Step 4. QA Report Generated........................................................................................................... 30 Step 4a. Feedback Provided to Project Champion.................................................................... 30 Step 4b. Application Package Resubmitted................................................................................ 31 Step 5. Assessment of Completeness and Accuracy of Claims.................................................. 31 Step 5a. Feedback Provided to Project Champion & Team..................................................... 31 Step 5b. Close Project.................................................................................................................... 31 Step 6. Project Accounted in Database........................................................................................... 31 Step 7. 12-Month Adjustment............................................................................................................ 31 Step 8. Review (QA) of Application .................................................................................................. 32 Step 8a. Feedback Provided to Project Champion.................................................................... 32 Step 8b. Application Resubmitted ................................................................................................ 32 Step 9. 12-Month Assessment .......................................................................................................... 32 Step 10. Adjustment at Program Conclusion.................................................................................. 32 Step 10a. Review (QA) of Application.......................................................................................... 32 Page ii
Step 10b. Feedback Provided to Project Champion.................................................................. 33 Step 10c. Application Package Resubmitted.............................................................................. 33 Step 11. Final Assessment ................................................................................................................ 33 Step 12. Close Project........................................................................................................................ 33 Part 5. Glossary and Reference Materials .......................................................................................... 35 Glossary................................................................................................................................................. 35 Reference Materials............................................................................................................................. 39 Attachment A. Product Carbon Reduction Worksheet ......................................................................... 1 Walmart Information............................................................................................................................... 1 Supplier Information............................................................................................................................... 1 Project Information ................................................................................................................................. 1 Qualification of Project............................................................................................................................... 3 Step 1. Qualification (Track 1)............................................................................................................. 3 Step 1a. Influenced Product Design............................................................................................... 3 Step 1b. Influenced Sales ................................................................................................................ 3 Quantifying Carbon Reductions ............................................................................................................... 4 Step 2. Describe Life Cycle Assessment .......................................................................................... 4 Step 3. Carbon Reduction effect......................................................................................................... 5 Step 4. Carbon Footprint Calculation: Continual Effect Carbon Reduction From Products ...... 5 Step 5. Carbon Footprint Calculation: One-Time Effect Carbon Reduction From Products ..... 6 Step 6. Sales of the Product................................................................................................................ 7 Step 7. Financial Value of Project ...................................................................................................... 7 Step 8. Product Trends ........................................................................................................................ 7 Step 8a. Raw Materials .................................................................................................................... 7 Step 8b. Manufacturing .................................................................................................................... 7 Step 8c. Consumer Use ................................................................................................................... 8 Step 8d. End-of-Life.......................................................................................................................... 8 Step 9. Statements ............................................................................................................................... 8 Step 9a. Uncertainty ......................................................................................................................... 8 Step 9b. Validity................................................................................................................................. 8 Step 9c. Claims ................................................................................................................................. 9 Attachment B. Facility/Process Carbon Reduction Worksheet ........................................................... 1 Page iii
Walmart Information............................................................................................................................... 1 Supplier Information............................................................................................................................... 1 Project Information ................................................................................................................................. 1 Qualification of Project............................................................................................................................... 3 Step 1. Describe Facility or Process Carbon Reduction Project ................................................... 3 Step 1a. Facility/Process Improvement ............................................................................................. 3 Step 1b. Energy Management ............................................................................................................ 3 Quantification of Reductions..................................................................................................................... 4 Step 2. Carbon Emissions Calculations Methodology..................................................................... 4 Step 3. Carbon Footprint Calculation................................................................................................. 4 Step 4. Financial Value of Project ...................................................................................................... 5 Step 5. Technology Trends ................................................................................................................. 5 Step 6. Statements ............................................................................................................................... 6 Step 6a. Uncertainty ......................................................................................................................... 6 Step 6b. Validity................................................................................................................................. 6 Step 6c. Claims ................................................................................................................................. 6 Page iv
Walmart Supplier GHG Innovation Program Guidance Document
Acknowledgements
Walmart would like to acknowledge the significant contributions the following organizations and
individuals who were instrumental to this guidance document’s creation:
ClearCarbon Consulting
ClearCarbon is a full-service consulting firm dedicated to creating
competitive advantage and improving profitability through carbon
measurement, management and monetization. Our solutions help
clients of all sizes understand their climate impacts and develop
strategies to reduce their carbon footprint, enabling long-term prosperity
and growth in a carbon-constrained world.
ClearCarbon staff who contributed to this document include: J. Renee Morin, Kyle Tanger,
Sarah Matheson, and Anna Nicholson.
For more information about ClearCarbon, please visit: http://www.clearcarboninc.com.
Environmental Defense Fund
Environmental Defense Fund (EDF), a leading national
nonprofit organization, represents more than 700,000
members. Since 1967, EDF has linked science, economics,
law and innovative private-sector partnerships to create
breakthrough solutions to the most serious environmental
problems. EDF has a 20 year track record of success in
partnering with business. To maintain its independence and credibility, EDF accepts no money
from corporate partners; generous individuals and foundations fund its work.
In 2005, EDF partnered with Walmart to measurably reduce its environmental impacts.
Environmental Defense Fund experts, Elizabeth Sturcken, Andrew Hutson, Maria Harris and
Andy Wunder were key contributors to the development of this document.
For more information on EDF’s work with Walmart, visit www.edf.org/walmart.
PricewaterhouseCoopers
PricewaterhouseCoopers provides
industry-focused services for public
and private clients. Our experienced
staff, combined with our global network, allow us to provide the support you need—wherever
you need it, at home and abroad, whatever the size of your organization.
The following PricewaterhouseCoopers staff contributed to this document: Barbara Kipp,
Christine Schuh, Nick Shufro, Alexandre Rossin, Sachin Mandal, and Kathy Nieland.
For more information about Pricewaterhouse Coopers, please visit: http://www.pwc.com.
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Walmart Supplier GHG Innovation Program Guidance Document
Introduction
Walmart believes that much more can be done to reduce the greenhouse gas emissions (GHG)
associated with the materials, manufacture, shipment, and use of the products we sell. We
believe that both cost-saving and revenue-generating GHG reductions can be captured by
reviewing and acting on cradle-to-grave lifecycle analyses of the products on our shelves.
Walmart has several initiatives underway to reduce the emissions from direct sources such as
its fleet and refrigeration units (scope 1) and from its purchased electricity (scope 2), but the
majority of emissions associated with the retail sector are embedded up and down the value
chain within the raw material extraction, manufacture, use, and disposal of the products sold
(scope 3).
To achieve reductions throughout the value chain and our products’ lifecycles, Walmart funded
the Walmart Supplier GHG Innovation Program and Walmart CEO Mike Duke subsequently
announced a GHG reduction goal for value chain emissions. The Program is intended to find,
achieve, and account for GHG reductions by working with suppliers throughout Walmart’s
product categories and departments.
This document describes the Walmart Supplier GHG Innovation Program, the GHG reduction
goal, the accounting guidance for projects as well as the due diligence process for reviewing
these projects. This document is intended for use by Walmart Project Champions, the Walmart
Supplier GHG Innovation Program team, and others within Walmart. In addition, this version of
the Guidance (version 1.0) is likely to evolve as it is road-tested with real projects.
This document is organized into five sections:
•
Part 1: The Program
Part 1 focuses on the background of the Walmart Supplier GHG Innovation Program. It
explains the supplier GHG reduction goal and how the goal will be achieved by Walmart.
This part provides background information that will help the reader to understand what
the program entails and who is involved.
•
Part 2: Project Accounting Guidance
The goal will be achieved by implementing a series of GHG reduction projects. The
“rules” that apply to these projects are described in Part 2. This guidance includes a
description of what projects will qualify for the Program and count towards the GHG
reduction goal. It also includes a description of how to account for the reductions
achieved.
•
Part 3: Submission of Project Instructions
Part 3 walks through the process of submitting a project and gives more detailed
instructions for completing the submittal package, including step by step instructions for
completing worksheets. The worksheet templates are attached to this document as
Attachments A and B.
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Walmart Supplier GHG Innovation Program Guidance Document
•
Part 4: Post-Submission
A description of what happens after an individual project is submitted to the Program is
included in Part 4. The project will undergo a review and assessment to ensure that it
fits the qualification criteria. In addition, the carbon reduction calculations will be
reviewed.
•
Part 5: Glossary and Reference Materials
Part 5 includes a glossary of terms that are commonly referred to in greenhouse gas
accounting and life cycle assessment (LCA) literature along with terms that are specific
to this Program. In addition to term definitions, Part 5 includes a list of commonly used
reference materials to help the Project Champion and other team members navigate
through emissions reduction projects.
Walmart is committed to this Program and to the continual improvement and streamlining of the
process described within. As part of this commitment, Walmart will review and update this
guidance document periodically and issue new versions as appropriate. Please check EDF’s
website (http://edf.org/walmartghg) for the most current version of the Guidance Document.
If you have questions about the contents of this document, please contact:
James Stanway
email: James.Stanway@wal-mart.com
phone: (479) 204-0334
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Walmart Supplier GHG Innovation Program Guidance Document
Part 1: The Program
The Walmart Supplier GHG Innovation Program (the Program) was launched in September
2009 to allow the Walmart Sustainability and Walmart Energy groups to work with suppliers to
achieve carbon reductions throughout Walmart’s value chain. Through the Program, Walmart
formed a team that includes several groups: the Applied Sustainability Center (ASC), BluSkye
Consulting, Environmental Defense Fund (EDF), ClearCarbon Inc., Pricewaterhouse Coopers,
and the Carbon Disclosure Project (CDP).
This team works with Walmart to identify projects, quantify reductions, engage suppliers to
implement reductions, and assess claims of reductions.
Walmart’s Impact on the Environment
Walmart has an impact on the environment through the stores it operates and the products it
sells. The impacts that these products have both upstream and downstream from Walmart’s
operations are referred to as the value chain. Upstream emissions are those related to
purchased goods and services. Downstream emissions are related to sold goods and
services. 1
Rough estimates by carbon emissions experts suggest that Walmart’s value chain (part of
scope 3, discussed below) emits orders of magnitude more carbon dioxide equivalents (CO2e)
during the life cycle of products than Walmart emits selling them. Therefore, Walmart’s largest
potential impact on GHG emissions is to engage suppliers and help them reduce product and
value chain GHG impacts. Walmart has decided to expand its suite of programs intended to
reduce carbon emissions beyond its corporate carbon inventory to emissions reductions in its
value chain.
Value chain emissions are categorized as scope 3, indirect emissions. Scope 3 is a category of
carbon emissions defined by the Greenhouse Gas Protocol (GHG Protocol). The three scope
categories include the following sources of emissions:
•
•
•
Scope 1: Direct emissions from on-site fuel combustion, refrigerants, and owned
vehicles.
Scope 2: Indirect emissions from purchased electricity, steam, and chilled water.
Scope 3: Indirect emissions from commuting, waste disposal, business travel, leased
and franchised operations, and the use of products and services along with upstream
supply chain emissions.
There are programs and projects dedicated to reducing Walmart’s carbon impact in scopes 1
and 2 already in place that continue to evolve such as those listed in the Walmart 2009 Global
Sustainability Report (http://walmartstores.com/Sustainability/7951.aspx). The Program focuses
solely on scope 3 emissions; particularly on those from the use of products and services and
those created upstream in the supply chain.
1
This definition aligns with that from the Scope 3 Accounting and Reporting Standard Draft (January
2010) developed as part of The Greenhouse Gas Protocol Initiative, a project of the World Business
Council for Sustainable Development and the World Resources Institute.
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Walmart Supplier GHG Innovation Program Guidance Document
Walmart’s Supplier GHG Reduction Goal
Walmart recognizes its impact on the environment and has committed to reduce it. On
February 25, 2010, Walmart CEO Mike Duke announced Walmart’s supplier GHG reduction
goal: to reduce the carbon footprint from its supply chain and products’ lifecycles by 20 million
metric tons of carbon dioxide equivalents (CO2e) between calendar year 2010 and 2015 2 .
As part of this commitment, Walmart will work with suppliers to reduce their emissions – which
they otherwise may not do – in some cases resulting in additional positive ripple effects.
Walmart will work to reduce emissions that result in GHG effects from the six primary Kyoto
Protocol gasses:
•
•
•
•
•
•
Carbon dioxide (C02)
Methane (CH4)
Nitrous oxide (N20)
Hydrofluorocarbons (HFCs)
Perfluorocarbons (PFCs)
Sulphur hexafluoride (SF6).3
To achieve the supplier GHG reduction goal, Walmart will identify opportunities to reduce
carbon impacts in coordination with select suppliers. Reductions may be identified in any phase
of a product’s life cycle. A product’s life cycle includes the following primary stages:
•
•
•
•
•
•
Raw material extraction
Manufacturing
Packaging
Distribution
Usage
Disposal
In each phase of a product’s life cycle there may be an opportunity to engage with suppliers to
implement carbon reduction efforts. In some cases, Walmart will also have to develop consumer
education materials to affect the way that consumers use a particular product.
Selection of Projects
The carbon reduction goal of 20 million metric tons 4 of CO2e from 2010 to 2015 will be achieved
through the implementation of multiple reduction projects. Walmart will engage suppliers to
achieve this goal.
2
This goal will be referred to as the “supplier GHG reduction goal,” or “the goal,” in this document. The
terms GHG and carbon will be used throughout the document somewhat interchangeably. Since the goal
is in carbon dioxide equivalents (CO2e), it includes the standard six GHGs as defined by the Kyoto
Protocol.
3
For the full text of the Kyoto Protocol, please see: http://unfccc.int/resource/docs/convkp/kpeng.pdf Page 5
Walmart Supplier GHG Innovation Program Guidance Document
To ensure that Walmart is selecting the most impactful projects for carbon reductions, Walmart
commissioned the Applied Sustainability Center (ASC) from the University of Arkansas to
review the carbon emissions intensity of all of the categories of products that Walmart sells.
ASC quantified the upstream life cycle impacts of
Walmart products and scaled the categories to sales
Carbon intensity =
data. The carbon intensity is the result of the upstream
carbon impact per unit
carbon impacts of a group of products multiplied by the
x units sold
sales volume of that category.
The carbon intensity calculation was aggregated at a very high level of Walmart product
categories to understand the top 20 most impactful categories. The study revealed that carbon
intensity is greatest in the following product categories (listed alphabetically): animal feed,
apparel, candy, cheese, frozen food, fruit, grains, household detergents, meat, media, milk,
motor oil, pharmaceuticals, produce, sanitary paper products, snacks, soap & shampoo, soft
drinks & beverages, televisions, and vegetables.
The study specifically looked at the carbon impacts from three phases of the life cycle:
•
•
•
Raw Materials
Materials Manufacturing & Transportation
Product Manufacturing & Transportation
While consumer use and end-of-life are not included in the ASC study, there are significant
impacts for some products in those phases. Walmart will also consider impacts in these two
downstream phases when seeking specific reduction opportunities.
The resulting carbon intensity is a starting point to identify priority categories. These categories
will be a first focus to achieve carbon reductions projects. The carbon intensity ensures that the
team focuses on the categories that have the biggest impact and therefore the greatest
opportunity for reductions.
Once a category has been identified as being “high carbon intensity”, the project team will
(described in the next section) conduct preliminary research to understand specifically where
the impacts are the greatest and what opportunities for reductions exist. In addition to the
carbon intensity research, the team captures the status of Walmart carbon-related initiatives and
identifies new opportunities by meeting with Walmart’s Sustainable Value Network (SVN)
captains, private brands (PB) champions, and others.
After understanding the carbon opportunities within a category, the team begins to identify
potential projects through industry and technology reviews and works with Walmart to
understand the feasibility of the projects. Feasibility includes (1) understanding the carbon
impact potential (magnitude), (2) identifying a Walmart lead, (3) determining activity in that
supplier category, and (4) estimating the practicality of implementation possibilities. Armed with
4
For this document and for all calculations related to this program, carbon measurements will be in metric
tons of CO2e. A metric ton = 2,205 pounds. From this point forward, the term “tons” will mean metric
tons.
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Walmart Supplier GHG Innovation Program Guidance Document
this information, the Program team then makes recommendations on which projects can begin
implementation.
The process of finding and selecting projects is outlined in Figure 1, Opportunities Identification,
Prioritization, and Engagement Process.
Project Teams
For each project, a team will be identified to lead implementation of the carbon reduction. The
roles will include:
•
•
•
•
Walmart Champion: The Walmart Champion (Champion) will be responsible for taking
the lead for the project, including documenting the project and quantifying the carbon
reductions.
Supplier contact: The Walmart Champion will work with one or several suppliers to
achieve the carbon reduction. This supplier contact(s) will be involved in implementation
of the project and providing data to help to quantify the reductions. Such data may
include energy use for a facility, material weights and dimensions of the product, etc.
Research Team & Program Management: Walmart is supported by ClearCarbon on
this project through identification of carbon reduction opportunities and review of all
carbon reduction claims for completeness and soundness of methodology. In addition,
Environmental Defense Fund (EDF) assists with research, guidance, and support for the
projects.
Assessors: After paperwork is completed, PricewaterhouseCoopers (PwC) 5 will
perform certain specified consulting procedures related to the assessment of the
process and methodology surrounding the measurement of the carbon emissions
reduction claims for use by Walmart management (see Part 3). PwC is performing these
procedures under consulting standards and will not be providing an opinion or any other
form of assurance relating to the claims.
5
“PricewaterhouseCoopers" and "PwC" refer to the network of member firms of PricewaterhouseCoopers
International Limited (PwCIL). Each member firm is a separate legal entity and does not act as agent of
PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not
responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of
their professional judgment or bind them in any way. No member firm is responsible or liable for the acts
or omissions of any other member firm nor can it control the exercise of another member firm's
professional judgment or bind another member firm or PwCIL in any way.
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Walmart Supplier GHG Innovation Program Guidance Document
Opportunities Identification, Prioritization, and Engagement Process
Activities:
Research internal business
drivers and ongoing projects
and initiatives.
Capture Opportunities
Walmart, ClearCarbon
Research state of industry,
science, and opportunities for
improvement
Research Opportunity
ClearCarbon
Research Internal Feasibility
Walmart, EDF
Prioritize high carbon, high
value (cost, trust, quality)
reductions
Recommend Innovations
Walmart, ClearCarbon,
EDF
Set goals, develop action
plan, and implement project
Engage & Implement
Walmart, ClearCarbon,
Suppliers
Measure carbon reductions
and assess measurements
Demonstrate &
Measure Results
Walmart, ClearCarbon,
PwC
Discuss with business
leaders, SVN Captains,
buyers
Actors:
Figure 1. Selection of Product
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Walmart Supplier GHG Innovation Program Guidance Document
Accounting for Carbon Reductions from Projects
For Walmart to understand the impact of the projects and progress towards the goal, the team
has developed guidance to understand what types of projects count and don’t count as well as
how to account for them. This guidance is described in Part 2 in detail. Generally, for a project
to count towards Walmart’s reduction goal, it can either be a carbon reduction for a product that
Walmart sells or a reduction at a facility/process that supplies Walmart.
For each of these two primary categories of projects, the reduction achieved must also be
“additional” and beyond business as usual (BAU) in terms of emissions accounting.
Specifically, the activity must:
1. Demonstrate that the initiative is truly additional, meaning that the action would not have
otherwise happened without Walmart’s influence, and
2. That the initiative represents performance beyond BAU, indicating that the improvement
is well beyond existing business trends and has the overall impact of emissions
reductions within a product category.
Walmart is accounting for carbon reductions that occur by comparing a new product, or change
to a facility, to a baseline. The baseline is determined by an assessment of the “business as
usual” (BAU) case. BAU is defining what would have been the carbon emissions of a product or
a facility if Walmart had not encouraged, introduced, or catalyzed the implementation of an
innovation. From this baseline, Walmart will then project the savings from the implementation of
facility-level carbon efficiency, or from the time that a product first is sold from Walmart’s stores,
until December 2015.
Carbon reductions on a per-product or per-facility level are then scaled to account for the
volume of sales or production. In a simplified example, if each t-shirt that Walmart sells were to
save 1 pound of carbon emissions when compared to a baseline product and 2,000 t-shirts are
sold in one year, then the savings for one year would be 2,000 pounds of carbon. If sales were
to remain consistent for five years, then over five years 10,000 pounds of carbon would be
saved.
Carbon Reduction Claims
Claiming carbon reductions for this project is purely to meet the carbon reduction goal. While
Walmart will make certain public claims about carbon reductions, the intent is not, nor will it ever
be under this project, to monetize carbon reduction claims. Walmart will not resell, retire, or
trade carbon reduction claims under this Program.
Additionally, the carbon reduction claims may not be “exclusive” to Walmart. It may be the case
that Walmart will help a supplier, through this Program, to achieve a carbon reduction project
that the supplier also wants to report publicly. In this case, both parties (Walmart and the
supplier) may state a claim of reduction. Since the reduction is not being sold or traded there is
no legal claim over the reduction that would make it exclusive to Walmart or to the supplier. The
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Walmart Supplier GHG Innovation Program Guidance Document
supplier may monetize (sell, trade, etc) carbon reductions at their discretion, though Walmart
will not be involved in these transactions. 6
Assessing Claims
Carbon reductions are accounted for by the Walmart Champion with the help of the supplier(s)
involved in the project. The completeness of the claims and the soundness of the methodology
are reviewed by ClearCarbon Consulting through a formal quality assurance (QA) process.
ClearCarbon will review the submittal for appropriateness of methodology, completeness, and
calculations. If the claims that are stated meet the QA check, they will then be assessed by the
third party assessors (PwC) for consistency with the standards.
After a project is initially submitted, it will be re-assessed and adjusted as needed after twelve
months and, the reductions claims will be reviewed by ClearCarbon and the assessors (PwC).
Project claims will again be adjusted and re-assessed at the conclusion of the project or
December 31, 2015, whichever comes first. The full description of the assessment of project
claims is described in Part 4: Post-Submission.
Program Timeline
In addition to reviewing each individual project, the portfolio (collective of all projects) will be
assessed by the third-party assessor (PwC) in January 2011, in October 2013, and again at the
2015 conclusion, assessing the reported results against these guidelines and standards. The
results from this assessment of the portfolio will be reported to the Walmart executive team. The
Program timeline is shown in Figure 2, Program Timeline.
Walmart Carbon Reduction Portfolio of Projects Accounting & Assessment Process
Goal Set
(01/25/10)
Project Started
Portfolio Accounting
(01/01/10)
(January 2011)
Portfolio Accounting Goal Ends
(October 2013)
(12/31/15)
Carbon Reduction Projects Implemented (Continuous)
2010
2015
Figure 2. Program Timeline
6
It is important to note that the carbon reduction claims, rules for quantifying reductions, and monetization
within this document are written under current regulatory standards in the U.S. If Federal or other laws
change that effects the guidance prescribed in this document, they will be re-assessed at that time. This
includes, but is not limited to: public reporting on carbon emissions regulated by the SEC, regulations set
by FTC for marketing claims, carbon tax or cap and trade legislation or regulation by EPA, or carbon
reporting by EPA.
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Walmart Supplier GHG Innovation Program Guidance Document
Unintended Consequences
The possibility exists that a product or process that is intended to have a carbon reduction on a
per-unit, or per-production output basis, elicits a net impact that overall increases total carbon
emissions. This would likely be due to increased sales or production that exceeds the expected
carbon savings from prior sales growth. Walmart has put in place a “sales trigger” to indicate
that an additional analysis needs to be conducted. The trigger for a study is a 10% increase in
sales growth year over year. The next step in evaluating the triggered project is to assess the
carbon efficiency gain. If the increased efficiency (or carbon reduction) is greater than the
increased sales percentage, then a further market analysis is not warranted. If, however, the
converse is true, as is described fully in Part 4, the team would conduct a market analysis of the
changes in sales to determine if there is indeed a net increase in carbon emissions due to the
project itself.
Part 2: Project Accounting Guidance
This part of the document clarifies the qualification and quantification of emission reductions. It
describes the methodology and decision-making process to determine when emissions
reductions can be attributed to Walmart to contribute to the supplier GHG reduction goal. It also
describes how to quantify the emission reductions achieved. This methodology is intended to
be rigorous, credible, and practical.
This document lays out both the types of emissions reduction opportunities that exist within the
life cycle of products sold by Walmart (and/or product categories) and the criteria used to
account for the reductions as part of Walmart’s product life cycle and supplier GHG reduction
goal. It outlines:
1. The qualifying criteria to determine if the carbon reduction applies; and
2. The quantification and accounting requirements to assure that the reductions in cost and
GHG emissions are real.
Instructions for submitting a project in conformance with this guidance are provided in Part 3 of
the document.
Qualification of Emissions Reduction Projects
For a project to qualify toward the goal, it must qualify according to the rules set forth in this
guidance. Generally speaking, Walmart can reduce product life cycle emissions by either
influencing the development or design of the products themselves and/or by improving the
facilities and processes used to make and transport products. The types of projects and criteria
for it to qualify are described below.
Types of Projects that Qualify
To evaluate Walmart’s role and contribution to reducing value chain carbon emissions, Walmart
has identified three project types. Walmart, through supplier engagement, will either:
1. Inspire the creation of and/or increase the sales of new “lower-carbon” products,
2. Improve existing products and/or sell more of improved-version products, or
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Walmart Supplier GHG Innovation Program Guidance Document
3. Make improvement to facilities or processes for a supplier. 7
As seen in the qualification decision tree in Figure 3, the three project types align either with a
product reduction (Track 1) or a facility/process reduction (Track 2). Figure 3 shows these two
separate tracks and the qualifying questions used to determine if a project qualifies for the goal.
Qualification Criteria
Qualification criteria must be met specific to each project type (product or facility/process).
Walmart has created the qualification decision tree to show each of the project types (illustrated
as decision tracks) and the questions and measurements that are used to validate Walmart’s
involvement. In addition to the questions posed in the decision tree, a project must meet the
following criteria to fully qualify under this program:
1. Have start and end dates within the goal period (see Timing)
2. Demonstrate the project is due to Walmart’s influence (see Additionality)
3. Demonstrate that the reductions are above and beyond normal trends in the market (see
Beyond BAU).
Timing
For a project to count toward this goal, the implementation start date must be within January 1,
2010 and December 31, 2015. The end date for all projects for carbon accounting purposes is
December 31, 2015. Therefore, a project that starts on December 31, 2015 will only have one
day of savings that can contribute toward this goal.
Though many carbon reduction projects may be underway and will continue to be developed
and encouraged, projects that begin before 2010 or after 2015 will not be included in this goal.
The “start date” for products coincides with the product’s point of sale or initial sale date. A start
date for a process or facility reduction is the same date that the process change is in effect and
is implemented, defined as, point of implementation.
7
A facility or process improvement may include transportation, logistics, or actual changes to a facility.
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Walmart Supplier GHG Innovation Program Guidance Document
Is the carbon
reduction at the
product or
facility/process
level?
PRODUCT
FACILITY / PROCESS
Was facility or
process improvement a direct result
of Walmart activity?
Is product newly
designed or
improved?
YES
NO
Did Walmart directly
influence the
development or
design or redesign?
YES
NOT
QUALIFIED
YES
YES
Did Walmart
influence increased
sales?
YES
QUALIFIED
Did Walmart
influence energy
management?
QUALIFIED
NO
QUALIFIED
NO
NO
QUALIFIED
NOT
QUALIFIED
NO
NOT
QUALIFIED
Track 1
Track 2
Figure 3. Qualification Decision Tree
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Walmart Supplier GHG Innovation Program Guidance Document
Additionality
GHG reduction protocols cite two core criteria for proving that the activity is “additional” and
beyond business as usual (BAU) in terms of achieving emissions reductions.
For a project to qualify, it must have happened because of Walmart’s influence, showing
additionality. This does not exclude projects that were also influenced by other entities,
programs, incentives, etc.
However, the Walmart Project Champion must be able to prove that the project would not have
happened at the time it did without Walmart’s involvement. In this project, Walmart’s influence
on the project is deemed as “additionality.” Additionality for products means that for a lowercarbon product:
•
•
Walmart directly influenced the development or redesign of the products, or
Walmart influenced the increased sales of the product.
Influencing the product directly means that Walmart engaged with a supplier to design or
influence the design of a new product that is more carbon efficient. For instance, if Walmart
encouraged a supplier to re-design laundry detergent to have a lighter-weight package than is
currently offered, this would be influencing the redesign. If Walmart sought out a new detergent
that was concentrated or eliminated specific raw materials that are more carbon intensive to
extract, then this would also be an influence of the redesign.
For facilities and processes, additionality means that:
•
•
Walmart directly contributed to the improvement of a facility or process, or
Walmart influenced energy management.
Beyond BAU
For both product and facility-based reduction projects, proving that the project is beyond
“business as usual (BAU)” is part of the qualification criteria.
Beyond BAU for Products
To claim a reduction for products, the improvements must be additional and go beyond BAU.
For example, if Energy Star requirements mean that products will improve energy efficiency by
5% each year, then the product that is being improved through this Program must exceed this
Energy Star requirement.
Beyond BAU for Facilities/Processes
To claim a reduction, facility-level improvements must be additional and go beyond BAU. For
example, it must not be solely complying with Federal Regulations. Initiatives such as lowcarbon energy, energy efficiency and transportation must be beyond typical business practices.
For example:
•
A facility achieving energy efficiency reductions must be beyond projected improvements
in that industry sector (likely needs to be beyond the 1-2% expected U.S. annual
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Walmart Supplier GHG Innovation Program Guidance Document
•
•
efficiency improvement). The facility may have had an energy audit which revealed
significant energy management opportunities and it implemented those changes.
Walmart’s Supplier Energy Efficiency Program (SEEP) initiatives can meet a beyond
BAU test if the technologies used are improvements over typical operations within that
industry.
For transportation gains, there must be documented fuel efficiency improvements
beyond industry average. Similarly, changes to alternative fuels and mode of
transportation must be clear improvements from the industry average baseline.
Quantification of Emissions Reduction Projects
Once a project has been deemed “qualified” for Walmart reduction claims through the decision
tree and additional criteria, the reduction in GHG emissions achieved by that product or
company project must be quantified. Guidance on measuring the emissions reductions is
supplied in Part 3 with the supporting worksheets in Attachments A and B.
In all cases, the submitted documentation, including life cycle assessments (LCAs) and facility
footprints, will be considered. At several points in time during the project's life, the assessors
(PwC) will perform consulting procedures, for the benefit of Walmart management, to assess
Walmart's process and methodology surrounding the measurement of carbon emission
reductions and related financial benefits against these guidelines.
Below is guidance on factors that need to be considered during the quantification of the
proposed reduction projects for products and facilities.
Uncertainty
For all data submitted, the Champion must disclose the uncertainty associated with the data.
Specifically, the Champion must describe the range of uncertainty in the data and the main
sources of uncertainty. This will be used as part of the project assessment.
Product Quantification (Track 1)
Quantification of product emission reductions from a project has several key elements:
•
•
•
•
•
•
Describe product and identify reference product;
Identify a GHG Calculation Methodology;
Describe if the product has a one-time climate change effect, or continual effect.
Calculate the carbon reductions achieved on a per functional unit basis including losses
of the product.
Describe the product trends.
Describe sales (historical and forecasted) of the product.
Product-based reductions require that a complete LCA be executed by either the supplier or as
part of an industry effort. To claim a reduction, the LCA must be compared against a defined
baseline of a reference product. The difference between the reference product’s GHG footprint,
adjusted to reflect trends in energy efficiency, and the new product’s GHG footprint represent
the potential carbon reduction for the implemented project. Part 3 includes guidance on LCA
accounting in addition to parameters to consider when defining the baseline for the reduction.
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Walmart Supplier GHG Innovation Program Guidance Document
Some guidelines and frequently asked questions that will help to complete the Product Carbon
Reduction Worksheet (Attachment A) are included in Part 3.
Describe Product and Identify a Reference Product
After selecting and describing the product that is eligible for the carbon reduction potential, the
Champion must identify a reference product against which to benchmark this product. The
reference product may be another product that serves a similar function. As a reference product
may vary significantly from the product in question in terms of technology, materials, or size, it is
important to compare them on this basic level of function, also known as a “functional unit”.
This is particularly crucial for products whose impacts greatly depend on how they are used at
the consumer level.
Part of the functional unit includes losses of the product for the supplier and for Walmart. This
should be embedded in the functional unit definition. Losses occur regularly from new products
and existing products due to take-back, lack of sales, damage or breakage, etc.
For example, a project that is based on a concentrated detergent might consider a cleanser that
is not concentrated as a reference product. Although the products may come in bottles of
different sizes, they provide the same function – the cleansing provided during a wash. In this
case, the functional unit could be one load of laundry (which would be defined as well).
Because less concentrated cleanser would be needed to provide one wash than the reference
product, its carbon impacts would potentially be lower on a per-wash basis. Carbon impacts will
be calculated on the basis of this functional unit, so it is important to keep this in mind when
selecting the reference product.
Other example functional units include:
•
Wall paint: A 10 ft2 surface area when comparing the amount of paint needed to provide
full coverage on a wall,
•
Lighting: A compact fluorescent light bulb (CFL) could be compared to an incandescent
light bulb. Though different products, they serve the same function; delivering a certain
amount of light over a certain time period. Assume one CFL bulb will provide light for
8000 hours and an incandescent bulb will provide light for 1000 hours, a comparison
would be made between one CFL bulb and eight incandescent bulbs for the functional
unit of X lumens of light for 8000 hours of use.
Selection of an appropriate functional unit is critical to insure an accurate comparison of carbon
impacts between the product and reference product.
The Champion must explain the start and end of the project. A project claim can be made from
the start of a project until the completion of the project or December 31, 2015, whichever comes
first. The start of the project is defined as the “point of sale”. The end of a project would be the
end of sales of that product. Emissions reduction accounting begins at the point of sale of the
new or improved product, or at the point of implementation of the facility project.
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Walmart Supplier GHG Innovation Program Guidance Document
As shown in Figure 4, the projections of carbon reductions achieved on a per project basis start
at the point of sale for products or the point of implementation for facility-level innovations and
extend to 12/31/2015, the end date of the goal.
Reduction Projections
2010
Point of Sale
Point of Implementation
2015
Figure 4. Timing of Reduction Projections
Identify a GHG Calculation Methodology
For each product, the Champion must define and describe the methodology used to calculate
the baseline and forecasted reduction potentials. The Champion may use a methodology that is
best suited for the calculation, but documentation and an explanation is required. Suggested
life cycle and corporate accounting methodologies include ISO14040 and ISO14064 standards,
WRI/WBCSD’s GHG Protocol Corporate and Product Life Cycle Reporting and Accounting
Standards (currently in draft form), and British Standards Institution’s PAS2050 (see Part 5 for
additional information).
The Champion should include the life cycle phases appropriate for the methodology. All phases
of the life cycle of the product must be addressed (unless sufficiently justified for exclusion) and
an appropriate methodology used for the assessment. Either an individual supplier or an
industry effort could produce the LCA documentation. In all cases it should be fully transparent.
The life cycle phases are:
•
•
•
•
•
Raw material extraction: The raw material product phase relates to the GHGs
embodied within the raw material inputs that compose a product, the emissions
associated with their extraction, and transportation to a processing plant.
Manufacturing: The manufacturing phase relates to the emissions released while
transforming raw materials and other inputs into a finished product, such as those
resulting from electricity generation and fuel use.
Distribution: The distribution and retail phase details emissions from transporting
finished goods to distribution centers and final retail locations and captures the
emissions from fuel combustion, truck and in-store refrigeration, store electricity
consumption, etc.
Consumer Use: Any emissions resulting from using the product, such as electricity
consumption, should be taken into account in the consumer use phase.
End-of-life / new life (recycle or other): The end-of-life product phase captures
product disposal and accounts for emissions from landfilling, incineration, composting,
and recycling.
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Walmart Supplier GHG Innovation Program Guidance Document
Note: Transportation must also be included in each stage, such as raw materials that require
transportation to a processing facility and transportation at end-of-life to a municipal solid waste
processing facility.
Projects Focused on Downstream Reductions
When a product change affects either the consumer use or end-of-life phases of a product’s life
cycle, further analysis is needed to understand the actual impacts of this project. The
downstream effects are lesser known as products reach many households and individuals, all of
which have different behaviors associated with the product.
For example, if a product sold in US Walmart stores was redesigned to be made with a
compostable material, Walmart could work with a supplier to label the product “compostable.”
However, it is essential to understand how the consumer actually follows the label. There is
limited composting at a commercial level throughout the US and while it is becoming more
popular, it is also limited on a per-household level. Therefore, to understand how the product is
being disposed of at its “end-of-life” phase, Walmart would need to conduct a market analysis.
The market analysis would examine the behaviors before and after the product label was
changed. This analysis is essential for supporting a claim of a carbon reduction.
When changing products for the consumer use and end-of-life phases, Walmart must work to
educate customers when appropriate to impact the behavioral changes needed.
As part of the Program, Walmart will fund these studies when other resources are not available.
It is essential that a Walmart Champion contact James Stanway early into the project if the
project has downstream effects (consumer use or end of life) so that a baseline can be
established.
Carbon Reduction Effect
The results from changing a product can be a one-time or continual effect depending on the
change. For example, if a product change effects the consumer use phase (as covered in the
previous section), there is a possibility that carbon reductions will be achieved for each use of
the product. Here are some examples to explain:
•
Energy Efficient Appliance: If Walmart sells an appliance, such as a toaster, that is 20%
more energy efficient than the reference product, it is demonstrating a continual effect
for each time the consumer uses the product. While calculating the emissions, it is
important to note the use phase considerations beyond a single use. This is a continual
effect change.
•
Concentrated laundry detergent: If Walmart creates a concentrated form of a liquid, then
the benefits are realized throughout the product’s life, and during the use phase the
benefits are multiple for each use. In this case, the use phase would need to consider
the reductions from each use of the detergent. This is a continual effect change.
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Walmart Supplier GHG Innovation Program Guidance Document
•
Reduced packaging for tissues: If Walmart works with a supplier to significantly reduce
the packaging for tissues; this would be a one-time effect change since there are no
savings in the use of the product itself.
The effect will need to be calculated appropriately when submitting the calculations for carbon
reductions achieved in Steps 3 and 4 of the Product Worksheet.
Calculate the Carbon Emissions from Products
The next critical step in quantifying the level of carbon reduction is to calculate the carbon
emissions from the product and the reference product on a per functional unit basis, as
described previously. The functional unit will ensure that a valid comparison is being made
between products.
Establish BAU Case
The reference product will be compared to a baseline that includes a BAU case. Only
reductions beyond those expected to occur in a BAU case will qualify to be counted towards the
value chain carbon reduction goal. While the Champion will be responsible for submitting
responses to specific questions which will inform the baseline, the actual BAU baseline
adjustment will be evaluated by ClearCarbon for this project. This is to ensure that there is no
bias in the Champion calculations and to also allow for additional research on an industry-wide
basis.
The BAU is established on a per product or per facility basis (for Track 2). For example, if
Walmart works to change the energy efficiency of a microwave (Track 1), then the Champion
must include baseline accounting for technology of a microwave. This would include projections
of how the microwave energy efficiency is improving compared to the projections without
Walmart’s influence through this project.
ClearCarbon will quantify the difference between a “BAU” case and the impact of the project
from a product improvement perspective solely. The difference between the two, or the delta,
will be calculated at the initial submittal based on projected trends for five years or until
December 31, 2015, whichever comes first. An example of product emissions reduction
accounting with the BAU baseline in place follows (and demonstrated in Figure 5):
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Walmart Supplier GHG Innovation Program Guidance Document
Projected Emissions Reduction
tons CO2e
120
100
Product A
Product A (BAU)
Product B
80
60
2010
2011
2012
2013
2014
2015
Figure 5. Emissions Reductions Calculated from the Business as Usual Case
•
Product A is the original (reference) product against which the new or improved product
is compared.
•
Product B is the new or improved product.
•
Product A (BAU) represents a predicted change in a product’s carbon efficiency over
time based on industry and market influences on the technology.
The BAU baseline adjustment is NOT sales dependent; it is the measurement of the original
product’s likely increases in energy efficiency or other changes that decrease the amount of
GHG’s produced per unit over time based on business as usual.
If technological improvements are expected for a typical product that affects energy or carbon
efficiency, then the baseline will need to be adjusted. The resulting five-year reduction is
represented by the shaded area under the BAU baseline (assumes 2010 start date in Figure 5).
To assess if BAU trends exist for a given product, the Walmart Champion, in coordination with
the supplier, will supply the following information in their submittal for the reduction period (point
of sale to December 31, 2015):
•
•
•
•
•
•
Are there any existing trends in material light-weighting expected for a typical product?
Explain.
Are there any trends in material switching (e.g., more or less carbon intensive plastics)?
Explain.
Describe any trends in recycled content or recycling rates of the comparison product.
Describe any use phase energy efficiency trends (e.g., more energy efficient hair
dryers).
Are any changes in waste handling or disposal that are carbon related expected?
Explain.
Where feasible, please supply expected percent changes for the given product category.
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Walmart Supplier GHG Innovation Program Guidance Document
Here are some examples that would provide evidence of a trend. Note that this is not a
complete list.
•
•
•
Industry/Market surveys conducted by third parties,
Government statistics (e.g., energy consumption patterns), or
Economic indicators that are linked to the product.
This information would need to be tracked over a minimum of a year, with ideally three years of
data that will help to establish a trend. If the product is new and no trend information exists,
then trends for a similar product category might be used.
These questions may be adapted to suit a particular project in advance of submission, or followup questions may be posed after the project package is received to gain further clarity
surrounding the specific project’s BAU trends.
ClearCarbon will review responses to the BAU baseline trend questions and evaluate the
expected changes to typical products based on external research conducted by ClearCarbon or
Walmart, but not by the supplier. The following issues will be considered:
•
•
•
If a product assumes more than 10% of the marketplace, it will be considered as the
baseline scenario and therefore no additional reduction claims can be made.
Baselines will only be adjusted at the initial submission of the project, at the 12-month
review, and at Program completion (2015).
Baseline adjustments will be documented by ClearCarbon and will include references to
any resources used to determine the new baseline. This information will be included as
part of the project package and will be heavily reliant on third-party sources.
In the event that the BAU baseline changes, ClearCarbon and Walmart will adjust the BAU
baseline.
Walmart will provide feedback to the supplier on findings. Any increase in carbon efficiency will
then be documented and adjusted accordingly. ClearCarbon will then re-calculate the submitted
emissions reduction based on the approved baseline.
One year after initial submittal of the project, the emissions reduction projections and BAU
assumptions will be adjusted to reflect any historical data available at that point, as shown in
Figure 6. Any new information on the reference BAU baseline (e.g., all air conditioners now fall
under mandatory Energy Star rule) for the product or facility against which the reduction is
compared will need to be incorporated at this time.
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Walmart Supplier GHG Innovation Program Guidance Document
Historical
2010
Forecasted
Year 1 re-submittal
2015
Figure 6. Reduction Projections Resubmitted
Sales of the Product
As part of the Program, the Walmart Champion must submit information projecting the sales of
a product that impact the scale of the GHG reduction. The exact information submitted as part
of the overall project Package will depend on timing of Package submittal and financial
measurability.
Timing
Financial accounting begins at the point of sale for the new or improved product or at the point
of implementation for the facility or scope 3 project. Financial projections include any potential
financial impact until December 2015. When the project Package is resubmitted (at 12 months
and at the 2015 project close out), the financial projections will be adjusted to reflect any
“historical” data available at that point. This is illustrated in Figure 7.
Financial Projections
2010
Point of Sale
Point of Implementation
Historical
2010
2015
Forecasted
Year 1 re-submittal
2015
Figure 7. Financial Projection Timing
Facility/Process Quantification (Track 2)
Quantification of facility or process emissions reductions from a project has several key steps:
•
•
•
Define the Carbon Emissions Calculation Methodology
Calculate the Carbon Footprint
Describe the savings from the project
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Walmart Supplier GHG Innovation Program Guidance Document
•
Describe technology trends
Facility or company level emissions reductions will require a facility or process GHG inventory
that quantifies energy efficiency and carbon-related improvement efforts and the resulting
emissions. Facility- and process-based inventorying guidance for completing the
Facility/Process Worksheet is provided in Part 3. Just as with product-based reductions, facility
and process reductions require documentation of an appropriate baseline to calculate the
resulting emissions reduction. A baseline may be a publically reported facility footprint for a
particular base year, for example.
Define the Carbon Emissions Calculation Methodology
The Champion needs to be explicit about the methodology applied to the calculation.
Referencing methodologies such as the GHG Protocol Corporate Standard (WRI/WBCSD) is
acceptable.
Calculate the Carbon Footprint
For the carbon footprint calculation from the project to be calculated, it must be compared to a
time interval before and after the project was implemented. The Champion should choose a
time that would be accurate for comparison. This will be the reference period (the time before
the implementation of a process/facility change) and the improvement period.
The Champion must transparently show all emissions on a per source level. Scope 1 emissions
should be broken into each emission source as well as for scope 2. A supplier’s scope 3
emissions will as a general rule not be included in this project. The supplier should work with the
Walmart champion to ensure that data are able to be assessed by a third party. These
emissions reductions will be considered, but are not encouraged since the data availability
presents a challenge for assessing and updating.
Describe Technology Trends
To understand the BAU baseline adjustments for Track 2 projects, the Champion must follow
the same methodology as described for products. In most cases, however, a facility or
manufacturing category will be the focus of the Track 2 reduction.
While the Champion will be responsible for submitting responses to inform the baseline, the
actual BAU baseline adjustment will be calculated by ClearCarbon for this project. This is to
ensure that there is no bias in the Champion’s calculations and to also allow for additional
research on an industry-wide basis.
Questions specific to a facility carbon reduction that will be answered by the Walmart Champion
include the following:
•
•
Are manufacturing energy efficiency gains expected in your industry? If so, explain and
supply expected percent improvements over time and provide evidence.
Are transportation efficiency trends related to the submitted project expected for your
industry? Explain and provide evidence.
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Walmart Supplier GHG Innovation Program Guidance Document
•
•
Are organic wastes handling methods expected to change for your industry (e.g.,
movement toward composting, biodigestion)? Explain and provide evidence.
Are facility recycling percentages expected to improve in your industry? Explain and
provide evidence.
Timing
As part of the baseline setting, the Champion must explain the start and end of the project. A
project claim can be made from the start of a project until the completion of the project or
December 31, 2015, whichever comes first. Emissions reduction accounting begins at the point
of implementation of the process or facility improvement.
•
•
The start of the project is defined as the “point of implementation”. This is when the
process or facility improvement comes on line and is first measurable.
The “end” is defined as when a process or facility improvement ends, the facilities are
not in operation, the relationship between the supplier and Walmart no longer exists, or
December 31, 2015, whichever happens first.
As shown previously in Figure 5, the projections of carbon reductions achieved on a per project
basis start at the point of sale for products or the point of implementation for facility-level
innovations and extend to December 31, 2015, the end date of the goal.
Financial Values of Projects
Through this guidance, Walmart intends to track carbon reductions and supplier-demonstrated
cost savings or increased value to customers. This will be calculated and included in the
worksheet submissions when possible.
GHG reductions that come from facility or process based projects require different financial
value accounting than product GHG reductions. Quantifiable financial value to customers may
include the following:
•
Savings to the customer on energy or resource consumption during use of the product,
resulting in lower energy bills and lower carbon emissions.
Financial value to the Walmart supplier might include the following:
•
•
Fuel or electricity savings at a factory or facility level translated into cost savings through
industry averages (e.g., average price of kWh x total kWh saved), or
Material savings from reduced input purchases or a switch to cheaper materials/inputs.
In some instances either product or project based initiatives will result in a savings to the
customer or a benefit to Walmart that are not financially measureable. In these cases, a
qualitative description of the positive impact should be included in the worksheets. Benefits to
suppliers and businesses may include:
•
•
•
Improved business conditions,
Public relations opportunities, or
Increased positive stakeholder engagement.
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Walmart Supplier GHG Innovation Program Guidance Document
Part 3: Submission How-To
This section details how to complete the worksheets and submit documentation to Walmart as
part of achieving the goal.
General Questions
Who Submits the Documentation?
Under this guidance, the submitter of the reduction package is termed the “Champion.” The
Champion will submit completed worksheets to Walmart for review. The Champion is expected
to be the Walmart Champion of the project, though the Champion may receive assistance and
input from the supplier contact as necessary. As described in Part 1, each project will have a
Walmart Champion along with a primary supplier contact or industry group representative where
applicable.
How Do I Submit A Project?
For each project submitted, the Walmart Champion will need to complete the worksheet
(Attachment A) to determine under which track the reduction project is qualified and then
complete the corresponding Track 1 or Track 2 Worksheet (Attachments B and C).
During the first half of 2010, submissions will be handled primarily via email correspondence.
However, a centralized database and webforms are under consideration and may be launch
under this Program. When the submission process changes, this section will be updated to
reflect the current status.
<Future guidance will include database location and instructions to assist in answering
worksheet question.>
Qualification
If my project does not fit the two tracks, does it qualify?
A project must fit one of the two tracks on the decision tree and meet the criteria spelled out in
this guidance document. If the project does not fit these two tracks then it may be best suited
for an internal Walmart goal or another initiative.
Does a Walmart store reduction count?
Only emission reductions that apply to Walmart’s scope 3 corporate footprint count for this
project. In addition the project must meet the decision tree qualification guidelines. Emission
reductions that occur at Walmart stores would not count.
Does a reduction at a Sam’s Club or an international store count?
This goal is global in nature and covers all Walmart, Sam’s Club, and international stores that
Wal-Mart Stores, Inc operates.
What are the dates for a project to “count” toward the goal?
The project must have been started after January 1, 2010 and before December 31, 2015. Any
reductions achieved after December 31, 2015 will not count towards this goal.
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Walmart Supplier GHG Innovation Program Guidance Document
What does it mean to “start” a project?
For this goal, the start of a project is defined as the first time a product is sold (Point of Sale) or
the start of a process or facility change (Point of Implementation).
Would a project that focuses on reductions from consumers (Walmart customers)
count?
Yes. All projects that affect the carbon emissions associated with Walmart’s upstream and
downstream impacts would count. A consumer’s behavior change is difficult to quantify without
market research. If a product change is going to happen at the consumer use phase, then
Walmart will commission a study to understand behavior changes before and after
implementation of a project. For these projects, it is essential to get in touch with James
Stanway (contact information on front page) as early as possible to establish this study.
(Track 1) Product Quantification
How do I select a methodology?
Prominent methodologies to use for the analysis of products include: the UK’s PAS 2050
product carbon footprinting guidance, WRI/WBCSD’s Product Life Cycle Accounting and
Reporting Standard that is under development and ISO 14064 guidelines. If an internal
methodology is chosen, the methodology must be transparent and documented as part of the
quantification submission. General guidelines include:
•
Determine the boundaries of the analysis according to the primary phases of a supply
chain: raw materials, manufacturing, distribution & retail, consumer use, and end-of-life.
•
Determine the types of greenhouse gas (GHG) emissions to be included in addition to
carbon dioxide.
•
Determine if a full life cycle analysis is warranted: It may not be necessary to include
emissions from all phases. For example, the consumer use phase for a napkin would
not have any associated emissions and therefore could be omitted from the analysis.
Additionally, if the new or improved product does not have any change in emissions from
the baseline product in a particular phase, these emissions could be omitted.
•
Determine emissions sources: in general, emissions should be captured from raw
material inputs, facility operations and transportation links between facilities. All facility
footprints and the product emissions attributions must be documented. Where primary
data collection is not feasible, secondary sources such as LCI database modules may
be used. However, in order to differentiate between a baseline product and the new or
improved product, including some portion of primary data collection is critical, especially
if the manufacturing phase is integral to the emissions reduction claim.
•
Where gaps in primary data exist, LCI databases such EcoInvent, Earthster, USLCI, can
be used to generate estimates. Transparency in the emissions factor sources is critical.
What do I need to include in my methodology documentation?
Include in your submission a description and discuss the following issues:
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Walmart Supplier GHG Innovation Program Guidance Document
1. Determine a functional unit (how is the product ultimately consumed? e.g. # of cans, # of
cases, etc.)
2. Product bill of materials: types and quantity of materials used to manufacture product
(e.g. raw materials, packaging materials, etc.)
3. Identify activities and processes involved in producing and consuming product
4. Types and quantities of all inputs and outputs (raw materials and energy sources) used
in processing, distribution/retail, consumer use)
5. Identify and quantify all transportation links throughout product life cycle
6. Identify and quantify energy and raw materials consumed during consumer use phase.
7. Discuss any by-products created during product manufacturing (e.g. other products,
direct gas emissions from manufacturing)
8. Discuss accounting for waste streams and their emissions
9. Describe data and emission sources used (e.g. company-specific data versus industry
proxy data, IPCC 2007 GWP 100a)
What is a Product Life Cycle Assessment?
When evaluating product GHG emissions, all phases of the life cycle of the product must be
addressed. A carbon product Life Cycle Assessment (LCA) is an assessment of the sum of a
product’s effects (e.g. GHG emissions) at each step in its life including extraction of raw
materials, manufacturing, distribution and retail, consumer use, and the end-of-life disposal.
Either the individual supplier or an industry effort could produce the LCA documentation. In all
cases it should be fully transparent and capable of being assessed.
How do I determine boundary conditions?
Describe the impact and relevance of each life cycle phase. While all products do not
necessarily have carbon emissions for the five life cycle phases listed below, all categories
should be addressed to ensure a full life cycle can be considered for any given product. In
cases where a life cycle phase is not applicable (e.g., a napkin has no meaningful emissions
from consumer use), the responder need only state the rationale for why it is not relevant.
Raw
Materials
Manufacturing
Distribution
& Retail
Consumer
Use
End of Life
Resulting Carbon Emissions in kg CO2e for each phase for a SINGLE Product:
Phase
Raw Material Extraction
Manufacturing
Distribution / Retail
Consumer Use
End-of-Life
Total Emissions (kg CO2e)
kg CO2e / product
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Walmart Supplier GHG Innovation Program Guidance Document
How do I account for loss rates?
While sales are a good gauge of number of items put into use in the market, there are several
examples of product loss that need to be considered for any individual product line. Items may
break, not be put in use (stored), stolen, or returned to store. Loss rates need to be incorporated
into the overall accounting of number of items put into the market in the functional unit of the
product’s LCA.
For example, Sam’s Club launched a milk jug redesign in 2008 that resulted in significantly less
plastic in jugs. However, there was an increased loss rate due to breakage. The loss rate must
be incorporated into the analysis to ensure the net benefit is understood and real.
In addition to the basic reduction derived from the emissions difference between the baseline
product versus new product, the supplier must identify whether the new product affects the
product loss rates. For example, a new “low-carbon” packaging solution could reduce the
carbon footprint of a product by 50%, but the product loss rate may increase due to reduced
structural integrity. This loss rate would need to be integrated into the carbon measurement for
the product. Therefore, if the loss rate increased from 1% to 11%, the analysis would have to
show it takes 111 units to successfully deliver 100 units to retail customers. The same issue is
true for packaging or product alternatives that lead to increased thefts.
(Track 2) Facility/Process Quantification
What is the “type of footprint?”
Indication of the type of footprint being conducted such as single facility or individual technology
should be included as part of Step 1 with a justification for that footprint category. For example,
if multiple initiatives have improved energy efficiency at a facility which supplies products to
Walmart, then a facility footprint would be most appropriate. If, however, only one piece of
equipment has been installed and the increased energy efficiency is directly measurable from
that installation, data would only need to be supplied for that individual technology.
What methodology should I follow for facilities or processes?
Walmart recommends that submitters of GHG emissions data follow the WRI/WBCSD GHG
Protocol when conducting a facility or company footprint for this reduction accounting exercise.
Acceptable emissions factors are indicated in this protocol and their use should be clearly
documented in the footprint calculations. The recommended emissions factors should also be
employed if either a process or technology footprint is conducted. A secondary document may
be submitted (such as an Inventory Management Plan or a Corporate GHG Accounting
Methodology) in addition to completing the corresponding worksheet.
What are the boundaries to consider in a facility/process quantification
calculation?
The boundary conditions (emission sources included in the study) determined for the reduction
assessment should be clearly defined. For facility or company footprints, both scope 1 and
scope 2 emissions should be included. Depending on the process or technology improvement
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Walmart Supplier GHG Innovation Program Guidance Document
either scope 1 or 2 or both may apply. The Champion should strive to be as complete as
possible in either case. The GHG Protocol offers some guidance on this subject.
Facility/
Technology
Scope
1
Refrigerant
Leakage
Onsite fuel
emissions
Scope
2
Mobile
emissions
Purchased
electricity
Indication of what type of reduction initiative is being conducted needs to be included as part of
Step 2 along with justification for that reduction initiative category. For example, if multiple
initiatives have improved energy efficiency at a facility that supplies products to Walmart then a
facility reduction initiative would be most appropriate. If, however, only one piece of equipment
was installed and the increased energy efficiency is directly measurable from that installation,
data would only need to be supplied for that individual technology.
Why do I need to show the baseline calculation per emission source?
The Champion must describe the type of reduction effort achieved and indicate if it is for a
single facility, multiple facilities, the entire company, or an individual technology. In addition to
reporting emission values, an explanation should detail how emissions are converted into tons
of CO2e. The supplier should only include emissions values for those sources that are pertinent
to the reduction. Documentation supporting the resulting GHG emissions accounting may be
requested by Walmart if further information is required.
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Walmart Supplier GHG Innovation Program Guidance Document
Part 4: Post-Submission
After the Champion submits the application package, which includes the Product and
Process/Facility worksheets and any required supplemental data/documentation, the project will
go through review to ensure that it is complete. This part describes the process of postsubmission.
A flow chart that describes this process is provided at the end of Part 4, Figure 8.
Step 1. Project Application Package Submitted
For each project, a supplier and Walmart Project Champion are involved in gathering the
appropriate paperwork. The Walmart Champion is ultimately responsible for submitting the
application package. In Step 1, the Walmart Champion submits historical and forecasted
carbon reduction and financial savings data from the point of sale of a product or point of
implementation of a project.
Carbon reduction information should be submitted following the format of the Qualification and
Quantification worksheets attached.
Step 2. Package Stored in Database
The submitted Package for each project/product is stored in a database managed by
ClearCarbon. The database will alert the Champion of a successful submittal and will notify
ClearCarbon and Walmart project managers of submittal of the project.
Step 3. Quality Assurance (QA) of Application
ClearCarbon will do a QA review of the application package for the following:
•
•
•
•
Qualification section of worksheet complete
Quantification section of worksheet complete & calculations are attached
Financial data submitted
Development of BAU case based on responses provided by Champion (see Part 2 for
more information)
If the project submittal package is complete, ClearCarbon will then update the package with the
BAU case and generate a QA report. While completeness is one part of the QA review,
ClearCarbon will also review the package to determine if the methodology, boundaries, loss
rates and other assumptions were properly executed.
Step 4. QA Report Generated
ClearCarbon will generate a report of completeness and appropriateness. This will be added to
the Package.
Step 4a. Feedback Provided to Project Champion
If there is missing or incomplete information or the assumptions are incorrect,
ClearCarbon will communicate this directly to the Project Champion and ask for
resubmittal (step 4b).
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Walmart Supplier GHG Innovation Program Guidance Document
Step 4b. Application Package Resubmitted
If a project goes through resubmittal, it will be reviewed again under Step 3.
Step 5. Assessment of Completeness and Accuracy of Claims
When all data is deemed complete and BAU adjustments have been made, the package will be
forwarded to the assessment team for review. If the assessment procedures are successfully
completed, then the Project moves forward to Step 6.
If the assessment identifies shortfalls in the quantification and there is an opportunity for
resubmission through clarifying the application, the Application is returned back to the
Champion through step 4a.
If the assessment process determines that the reduction project is ineligible for this program
(e.g., evidence of a reduction cannot be produced) then the following steps apply:
Step 5a. Feedback Provided to Project Champion & Team
If a project is deemed ineligible to be counted as part of the Walmart Supplier GHG
Innovation Program, then it will be deemed “invalid”. An ineligible project would be one
that does not qualify for this program. In this case, information will be provided to the
Champion and the team to ensure that the reasons are understood.
Step 5b. Close Project
If the project is “invalid”, it will be closed in the database and reasons for closure will be
documented.
Step 6. Project Accounted in Database
If the assessment procedures determine that the Project information has been completed
consistent with the guidelines, then the Project gets accounted in the database as a carbon
reduction.
Step 7. 12-Month Adjustment
Twelve months after Point of Sale or Point of Implementation of a project, the Champion will be
asked for a resubmission of the project package to reflect historical data. 8 This will allow for the
review of the assumptions underlying the projected baseline of the project and the initial
projections of emissions reductions.
At the 12-month mark for products, the sales of the product must be reported. Because the goal
of this project is to reduce GHG emissions, the volume of products produced and sold must also
be tracked. Though each product will have a different sales growth/decline, it is generally
expected that most products will have a sales increase. Given this, if a product’s sales from
year to year (point of sale to 12-month adjustment) grow more than 10%, then an additional
8
The Point of Sale or Implementation will rarely coincide with the submission date of a project package.
Because the data of interest are the historical emissions and sales data, the 12-month adjustment is tied
to the start of the project, not the submissions date. If the initial submission already includes 12 months
of historical data then a resubmission is not required and the project will only be re-adjusted at the close
of the program.
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Walmart Supplier GHG Innovation Program Guidance Document
investigation must be conducted to ensure that there is a net decrease in carbon. This is known
as the “sales trigger”.
The next component of the analysis will be to conduct a quick comparison of the emissions
reduction percentage per product and compare it against the sales increase. If the reduction
percentage is higher than the sales increase, no further study is warranted. If the converse is
true, then a more in-depth market study will be performed. The analysis will include evaluation
of change in price, population growth, elasticity, market trends and market share. It will evaluate
projected increases of the product category year to year. If this is less than the actual growth of
the product sales, then further investigation is required to quantify the net impacts. There are
two expected scenarios from a growth in sales: either Walmart captures market share or
demand increases. Here are the governing rules for these two scenarios:
1. If the sales increase exceeds growth projections, but Walmart has captured market
share from a competitor or competing product within Walmart stores, then this is not
considered a net increase.
2. However, if through this project Walmart creates new demand for a product, then a full
analysis is required to understand the net impact.
Step 8. Review (QA) of Application
At the 12-month adjustment mark, ClearCarbon will review the resubmitted application and
either provide feedback to the Champion if additional changes are needed (step 8a), or notify
the assessment team for the 12-month assessment (step 9).
Step 8a. Feedback Provided to Project Champion
If the assessment or the QA review reveals additional information is needed, then
feedback will be provided to the Champion.
Step 8b. Application Resubmitted
The Champion will be responsible for resubmitting a complete package.
Step 9. 12-Month Assessment
The assessment team will review the updated information and, if necessary, either verify or ask
the Champion for more information (step 8a), and will report on its assessment to Walmart
management.
Step 10. Adjustment at Program Conclusion
At the conclusion of the project accounting or at December 31, 2015, whichever comes first,
another baseline adjustment will be made by the Champion. The Champion will provide
additional carbon and financial data, as appropriate to review the assumptions underlying the
historical data against the forecasted data.
Step 10a. Review (QA) of Application
At the Program Conclusion, ClearCarbon will review the resubmitted application and
either provide feedback to the Champion if additional changes are needed (Step 8a), or
notify the assessment team for the final assessment (Step 9).
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Walmart Supplier GHG Innovation Program Guidance Document
Step 10b. Feedback Provided to Project Champion
If further adjustments are needed, the assessors will provide the Project Champion with
feedback about adjustments needed.
Step 10c. Application Package Resubmitted
As needed, the Champion will need to resubmit the application package to ensure
completeness as described by the assessors and QA review findings.
Step 11. Final Assessment
The assessment team will conduct a final assessment on the updated information and will report
on its assessment to Walmart management.
Step 12. Close Project
At the conclusion of a project, it will be accounted for and closed in the database.
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Walmart Supplier GHG Innovation Program Guidance Document
1. Project
Application
Package
Submitted
2. Package
Stored in
Database
4b.
Application
Package
Resubmitted
3. Review
Application
4a. Feedback
to Project
Champion
4. QA Report
Generated
Package
Complete
Package
Incomplete
“Owner”
Legend
ClearCarbon
Pricewaterhouse
Coopers
Walmart
Capture & Review
Assess & Update
Project
Accepted
6. Project
Accounted in
Database
7. 12-Month
Adjustment
8. Review
Application
9. 12-Month
Assessment
8b.
Application
Package
Resubmitted
8a. Feedback
to
Project
Champion
5. Assess
Completeness and
Accuracy
Project
Invalid
5a. Feedback
to Project
Champion
5b. Close
Project
10. Year 5
or 2015
Adjustment
10a. Review
Application
11. Final
Assessment
12. Close
Project
10c.
Application
Package
Resubmitted
10b.
Feedback to
Project
Champion
Figure 8. Project Post-Submission Process
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Walmart Supplier GHG Innovation Program Guidance Document
Part 5. Glossary and Reference Materials
Glossary
Term
Additionality
Assessor
Baseline
Base year
Business-As-Usual
(BAU)
Carbon Dioxide
Equivalents (CO2e)
Carbon Footprint
Carbon Intensity
Climate Change
Cradle-to-Gate
Cradle-to-Grave
Energy Efficiency
Definition
A criterion for assessing whether a project has resulted in GHG emission
reductions or removals in addition to what would have occurred in its
absence.
In this program, the assessors are a third-party firm who is providing
review of projects for completeness and accuracy of carbon reduction
claims.
A hypothetical scenario for what GHG emissions, reductions, removals or
storage would have been in the absence of the GHG project or project
activity.
A historic datum (a specific year or an average over multiple years)
against which a company’s emissions are tracked over time.
This is the case that defines what the carbon emissions of a product or a
facility would have been if a company was not encouraged, introduced,
or catalyzed to implement an innovation.
Standard GHG emissions reporting metric. Each gas has a different
global warming potential. For simplicity of reporting, the mass of each
gas emitted is commonly translated into a carbon dioxide equivalent
(CO2e) amount so that the total impact from all sources can be summed
to one figure.
A measure of the amount of carbon dioxide emitted into the atmosphere
by an individual, organization, event or product. Typically measured in
tons of CO2 equivalent emitted annually, a carbon footprint is directly
related to consumption of fossil fuels, land use changes, and of electricity
from non-renewable energy sources as well as from emissions of
refrigerants.
This measurement takes into account the carbon impact of a single unit
of product and multiplies that by the number of units sold.
Refers to any significant change in measures of climate (such as
temperature, precipitation, or wind) lasting for an extended period
(decades or longer). Climate change may result from natural factors
(changes in the sun's intensity, or slow changes in the Earth's orbit),
natural processes (changes in ocean circulation), and human activities
(burning fossil fuels, and changing land surfaces – deforestation, or
urbanization)
An assessment of a partial product life cycle from raw material extract
(‘cradle’) to the factory gate (i.e., before it is transported to the consumer)
also defined as upstream emissions.
The full Life Cycle Assessment from raw material extraction (‘cradle’) to
use phase and disposal phase (‘grave’). This assessment would include
both upstream and downstream emissions sources.
Refers to products or systems using less energy to do the same or a
better job than conventional products or systems. Energy efficiency
saves energy, saves money on utility bills, and helps protect the
environment by reducing the demand for electricity.
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Walmart Supplier GHG Innovation Program Guidance Document
Term
Functional Unit
Greenhouse Effect
Greenhouse Gases
(GHGs)
GHG Innovation
Carbon Reduction
Project
GHG Inventory
GHG Protocol
Initiative
Ineligible Project
ISO14040
Definition
The functional unit is the quantified performance of a product system for
use as a reference unit (ISO 14044:2006, 3.20), and establishes the
basis for which the GHG inventory is calculated and reported. Some
examples of functional units include drying 1000 pairs of hands; delivery
of 1000 liters of fruit drink; provision of 890 lumens over 1 year; transport
of 6 people and cargo by a vehicle over 100,000 miles; and many others.
(see WRI/WBCSD’s Product Life Cycle Accounting and Reporting
Standard).
Long-wave radiation is prevented from leaving the Earth’s atmosphere
due to greenhouse gases, which contributes to higher temperatures on
the surface of the Earth.
Atmospheric gases that contribute to the greenhouse effect and thus to
global warming. Human activities (particularly burning fossil fuels) are
responsible for the buildup of excessive and fast-increasing levels of
greenhouse gases
Carbon Dioxide (CO2) – The most important and common greenhouse
gas. CO2 emissions result from the combustion of fuel, from land use
changes, and from some industrial processes.
Methane (CH4) – Simplest type of hydrocarbon is the primary component
in biogas and natural gas.
Nitrous Oxide (N2O) – Nitrogen oxides are produced in the emissions of
vehicle exhausts and from power stations.
Hydrofluorocarbons (HFC) – HFCs are emitted as by-products of
industrial processes and are also used in manufacturing. (R-134a)
Perfluorocarbons (PFC) – PFCs are used in refrigerating units and fire
extinguishers. Primary aluminum production and semiconductor
manufacture are the largest known human-related sources.
Sulphur Hexafluoride (SF6) – Mainly used as an insulating medium in the
electrical industry or as an inert gas filling in windows.
A specific project or activity carried out by a supplier of Walmart focusing
on either the product or facility/process resulting in a reduction of the
amount of GHG emissions.
The individual “projects” will collectively add to achieve the goal.
A list of greenhouse gas emission sources and associated quantities
calculated for or by an organization.
A multi-stakeholder collaboration convened by the World Resources
Institute (WRI) and World Business Council for Sustainable Development
(WBCSD) to design, develop, and promote the use of GHG accounting
and reporting standards for business. It comprises of two separate but
linked standards—the GHG Protocol Corporate Accounting and
Reporting Standard and the GHG Protocol Project Quantification
Standard.
An ineligible project would be one that does not qualify for this program.
It can be ineligible because it does not meet the criteria of being focused
on a supplier, does not fit into the timeline, does not demonstrate
additionality, or is not beyond BAU. Ineligible projects will not be
quantified.
ISO 14040 provides a set of standards for life cycle assessments (LCAs).
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Walmart Supplier GHG Innovation Program Guidance Document
Term
standards
Kg CO2e / product
Life Cycle
Assessment (LCA)
Operational
Boundary
Organizational
Boundary
PAS2050
Point of Sale
Point of
Implementation
Project Champion
Research Team
Scope 1 (Direct
Emissions)
Scope 2 (Indirect
Emissions)
Scope 3 (Other
Indirect Emissions)
Supplier Contact
Sustainability
Quality Assurance
(QA)
Qualification
Decision Tree
Supplier
Definition
These standards include: definition of the goal and scope of the LCA, the
life cycle inventory analysis (LCI) phase, the life cycle impact assessment
(LCIA) phase, the life cycle interpretation phase, reporting and critical
review of the LCA, limitations of the LCA, the relationship between the
LCA phases, and conditions for use of value choices and optional
elements.
Kilogram of carbon dioxide equivalents per product. A unit of measure of
the carbon embedded in a product for each life cycle phase or the
summed life cycle phases.
An assessment of the sum of a product’s effects (e.g. GHG emissions) at
each step in its life including extraction of raw materials, manufacturing,
distribution and retail, consumer use, and the end-of-life disposal.
The parameters that determine the direct and indirect emissions
associated with operations owned and controlled by the reporting
company.
The parameters that determine the operations owned or controlled by the
reporting company.
A Publicly Available Specification (PAS) methodology developed by the
British Standards Institution (BSI) for measuring the embodied
greenhouse gas (GHG) emissions from goods and services.
The start date that a product is sold at Walmart.
The start date for a process change to be implemented at a supplier
facility.
An internal lead responsible for setting up appropriate meetings and
identifying suppliers who would be best suited to implement a carbon
reduction project.
The Research Team helps to identify carbon reduction calculations and
review all carbon reduction claims for completeness and soundness of
methodology.
GHG emissions that result from sources owned or controlled by the
company. Direct emissions include; on-site fuel combustion, refrigerants,
or fugitive emissions.
GHG emissions that result from the generation of purchased electricity.
Indirect emissions include electricity or steam purchases.
GHG emissions that result from sources not owned or controlled by the
company, but are a consequence of company activity. Other emissions
include use or disposal of products or services, supply chain or
distribution/logistic emissions, and business travel emissions
This supplier contact will be involved in implementation of the project and
providing data to help to quantify the reductions from the project.
A state or process that can be maintained indefinitely.
This is a process of reviewing project submittals for appropriateness of
methodology, completeness, and calculations.
The methodology created by Walmart to show the project types
(illustrated as decision tracks) and the questions and measurements that
address whether or not project proposals qualify toward the Walmart
Supplier GHG Innovation Program.
A company that sells merchandise to Walmart.
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Walmart Supplier GHG Innovation Program Guidance Document
Term
Supplier Energy
Efficiency Program
(SEEP)
Walmart Supplier
GHG Innovation
Program
Supply Chain
Supplier GHG
Reduction Goal
Sustainable Value
Networks (SVNs)
Value Chain
Definition
This Walmart initiative conducts energy efficiency audits and retrofits of
participating supplier buildings. The program helps suppliers learn from
Walmart’s experience with energy efficiency and forms the basis of an
energy efficiency model that can be adopted by any private or public
sector organization that manages a supply chain.
This program seeks to find, achieve, and account for emission reductions
by working with suppliers throughout Walmart’s product categories and
departments. The initial timeline of this program is between January 1,
2010 and December 31, 2015.
The upstream sequence of events that suppliers undertake such as the
extraction of raw materials, manufacturing of products, and distribution to
retail outlets. The resulting emissions from these processes are
categorized as scope 3, indirect, as defined by the GHG Protocol.
This commitment by Walmart is to reduce the carbon footprint of its
supply chain by 20 million metric tons of CO2e between January 1, 2010
to December 31, 2015.
Strategic networks that bring together internal company leaders, supplier
companies, academia, government, and non-governmental organizations
(NGOs) to help integrate sustainable practices into all parts of Walmart’s
business.
In the context of carbon emissions, this term refers to the impact that
goods and services purchased upstream from suppliers and sold
downstream to consumers have on the environment.
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Walmart Supplier GHG Innovation Program Guidance Document
Reference Materials
Applied Sustainability Center (ASC) Lifecycle Assessment Overview:
http://asc.uark.edu/LCA_summary_ver2b.ppt
Carbon Disclosure Project (CDP) Supply Chain Report: www.cdproject.net/CDPResults/CDPSupply-Chain-Report_2010.pdf
Carbon Trust –Carbon Footprints in the Supply Chain Report:
www.carbontrust.co.uk/Publications/pages/publicationdetail.aspx?id=CTC616
EcoInvent Centre: www.ecoinvent.org
Earthster: www.earthster.org
Greenhouse Gas Protocol Corporate Standard: www.ghgprotocol.org/files/ghg-protocolrevised.pdf
ISO 14064 Guidelines: www.techstreet.com/cgibin/detail?doc_no=ISO%7C14064_1_2006&product_id=1259126
National Renewable Energy Laboratory—Lifecycle Inventory: http://www.nrel.gov/lci/
PAS 2050 Product and Services Carbon Footprint Guidance:
www.bsigroup.com/upload/Standards%20&%20Publications/Energy/PAS2050-Guide.pdf
Project Accounting and Reporting Standard: www.ghgprotocol.org/files/ghg_project_protocol.pdf
Product Life Cycle Accounting and Reporting Standard: www.ghgprotocol.org/files/ghg-protocolproduct-life-cycle-standard-draft-for-stakeholder-review-nov-2009.pdf
U.S. Life Cycle Inventory Database Roadmap: www.nrel.gov/docs/fy09osti/45153.pdf
Walmart Global Sustainability Report 2009: www.walmartstores.com/download/3722.pdf
Walmart Supplier Sustainability Assessment: http://walmartstores.com/Sustainability/9292.aspx
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Walmart Supplier GHG Innovation Program Guidance Document
Attachment A. Product Carbon Reduction Worksheet
Instructions to Walmart Champion:
This worksheet is intended to be completed by the Walmart Champion who is working with a
supplier (or suppliers) to achieve carbon reductions from either improving a product or offering
more sales of an improved product. Additional instructions and background on this document
can be found in the Walmart Supplier GHG Innovation Program Guidance Document. If you
have questions while completing this worksheet, please contact Jim Stanway at Walmart
Energy Team.
If your project does not pertain to a product change, but relates to a carbon reduction from a
facility or process from a supplier, complete the Facility/Process Worksheet, not this worksheet.
Please see the attached decision tree to see if your project qualifies before answering
quantification questions.
Fill in all sections that are in gray. Instructions are provided in red throughout.
Walmart Information
For the person completing this worksheet, please fill in your contact below. You are the
“Walmart Champion.”
Walmart Champion
Name:
Email:
Phone:
Supplier Information
If multiple suppliers are involved, please add additional contacts below.
Company Name:
Contact Person Name:
Email:
Phone:
Project Information
Tell us about the project and what product is being affected by the project.
Project Name:
Product Name:
Date Submitted:
Date of First Sale of Product:
(check if actual or anticipated)
Date of Sale
Anticipated
Actual
Page A-1
Walmart Supplier GHG Innovation Program Guidance Document
Is the carbon
reduction at the
product or
facility/process
level?
PRODUCT
FACILITY / PROCESS
Was facility or
process improvement a direct result
of Walmart activity?
Is product newly
designed or
improved?
YES
NO
Did Walmart directly
influence the
development or
design or redesign?
YES
NOT
QUALIFIED
YES
YES
Did Walmart
influence increased
sales?
YES
QUALIFIED
Did Walmart
influence energy
management?
QUALIFIED
NO
QUALIFIED
NO
NO
QUALIFIED
NOT
QUALIFIED
NO
NOT
QUALIFIED
Track 1
Track 2
Figure A. Project Qualification Decision Tree
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Walmart Supplier GHG Innovation Program Guidance Document
Qualification of Project
Step 1. Qualification (Track 1)
1.1 Provide a brief description of the product.
Briefly describe in box below including size, SKU (store keeping unit) or UPC, fine line
description and prime item 9 , and manufacturer’s specifications.
For a project to qualify, it must either meet the criteria of step 1a or step 1b.
Please read step 1a and 1b and answer the questions.
Step 1a. Influenced Product Design
1a. Did Walmart directly influence the product’s development or design to
become lower-carbon?
Check relevant answer.
If yes, explain how in box below and move to step 2. Project qualifies.
If no, go to step 1b.
Yes
No
Yes
No
Step 1b. Influenced Sales
1b. Did or will Walmart influence increased sales of the lower-carbon
product?
Check relevant answer.
If yes, explain how in box below and move to step 2. Project qualifies.
If no, project does not qualify. Proceed no further.
9
“Fine line” and “prime item” are terms that describe fields in Walmart’s Retail Link. Page A-3
Walmart Supplier GHG Innovation Program Guidance Document
Quantifying Carbon Reductions
Step 2. Describe Life Cycle Assessment
For each project submitted, Walmart must compare the emissions reductions from the product
to a reference product using the life cycle assessment (LCA) approach. Attach your LCA
calculations to your submission. In the attachment, include all of the following:
1. The standard under which the LCA was conducted (i.e., PAS 2050)
2. Product bill of materials
3. Activities and processes in the production and consumption associated with the product
4. Transportation links
5. Energy and raw materials consumed during consumer use
6. By products created during product manufacturing
7. Waste streams and their emissions
8. Data and emission sources used in the calculations (for example primary versus
secondary data).
2.1 What is the best reference product?
Instructions: Please describe a reference product that is comparable to the low-carbon product
in the box below. The reference product may be another product that serves a similar function.
2.2 Why is this product the most appropriate reference product?
Instructions: Please describe in the box below.
2.3 What is the product’s functional unit of comparison?
Instructions: Please describe in the box below.
2.5 What is the number of products needed to fill the
functional unit (this includes losses)?
New Product
Reference Product
(From 1.1)
2.4 Describe how the functional unit was developed including time parameters and packaging
units.
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Walmart Supplier GHG Innovation Program Guidance Document
Step 3. Carbon Reduction effect
Describe below the effect of the carbon reduction in detail. Explain where the reduction occurs
in the life cycle of the product and if the effect is a single instance or ongoing. For examples,
see the Guidance Document.
Carbon Reduction Effect:
(Explain in box below)
One-Time Effect
Continual Effect
Step 4. Carbon Footprint Calculation: Continual Effect Carbon Reduction
From Products
Please complete Step 4 only if your product has a continual carbon reduction effect. If the
product has a one-time effect, skip to Step 5.
For the new product and the reference product to be compared, each must follow the same
approach and include emissions calculations for the same life phases. Complete Step 5 if you
have a product that’s carbon impact has a one-time effect.
4.1 Describe the boundaries of the carbon footprint
calculation.
Yes
Instructions:
Check all boxes yes or no
Are raw materials and their extraction included?
Are the product manufacturing/processing steps
included?
Are distribution and retail included?
Is consumer use included?
Is end-of-life included?
4.2 Why was a life phase excluded?
Instructions:
For all “No” responses in 4.1, please explain why this was excluded.
No
Transportation
Included?
4.3 What were the carbon emissions from the functional unit of each product per phase?
Life Phase of Product:
New Product
Reference Product
(kg CO2e/functional unit) (kg CO2e/functional unit)
Raw Materials
Manufacturing
Distribution/Retail (manufacturer to DC)
Consumer Use (for life of product use)
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Walmart Supplier GHG Innovation Program Guidance Document
End-of-Life
Total Emissions (lbs CO2e)
Total Carbon Reduction/functional unit
= Reference Product Total Emissions –
New Product Total Emissions
What is the expected life of the product in
years (use fraction if necessary)?
Expected Use of the Product/Year
Step 5. Carbon Footprint Calculation: One-Time Effect Carbon Reduction
From Products
Please complete step 5 ONLY IF you have a product that has a one‐time effect from carbon reduction. 5.1 Describe the boundaries of the carbon footprint
calculation.
Yes
Instructions:
Check all boxes yes or no
Are raw materials and their extraction included?
Are the product manufacturing/processing steps
included?
Are distribution and retail included?
Is consumer use included?
Is end-of-life included?
5.2 Why was a life phase excluded?
Instructions:
For all “No” responses in 5.1, please explain why this was excluded.
No
Transportation
Included?
5.3 What were the carbon emissions from the functional unit of each product per phase?
Life Phase of Product:
New Product
Reference Product
(lbs CO2e/functional unit) (lbs CO2e/functional unit)
Raw Materials
Manufacturing
Distribution/Retail (manufacturer to DC)
Consumer Use
End-of-Life
Total Emissions (lbs CO2e)
Total Carbon Reduction/functional unit
= Reference Product Total Emissions –
New Product Total Emissions
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Walmart Supplier GHG Innovation Program Guidance Document
Step 6. Sales of the Product
To scale the reductions on a per unit basis, we need to understand product sales or savings to
the customer.
If sales information is available (dependent on when the project is submitted and when the
product is first sold), then please provide data here. If sales data is not available, please include
forecasted sales.
Note that this will be updated twelve months after initial submission and again before project
completion.
6.1 What are the sales (by unit and revenues) of the new product and reference product?
Dates
New Product
Reference Product
Start/End
Units
Revenues
Units
Revenues
(after 1/1/2010)
Sold
(USD)
Sold
(USD)
Historical Sales
Forecasted Sales
Step 7. Financial Value of Project
GHG reductions that come from Walmart product changes offer financial value to projects.
Please list these below.
7.0 What financial value does this product offer and who do they apply to? (i.e., Walmart,
customer, supplier, etc).
Step 8. Product Trends
For Walmart to assess how a product improvement compares to trends in the market towards
carbon efficiency, please answer the following questions and provide any additional evidence
available that indicates that this product is improving beyond “business as usual.”
Answer the questions that apply to the life cycle phases that were affected by the low-carbon
product. Where feasible, please supply expected percent changes for the given carbon
category.
Step 8a. Raw Materials
8a.1 Are there any trends in material switching (e.g., more or less carbon intensive plastics) for
the product?
Explain in the box below.
Step 8b. Manufacturing
8b.1 Are there any existing trends in material light-weighting expected for the product?
Explain in the box below.
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Walmart Supplier GHG Innovation Program Guidance Document
Step 8c. Consumer Use
8c.1 Are there any consumer use phase energy efficiency trends (e.g., more energy efficient
hair dryers) for the product?
Explain in the box below.
Step 8d. End-of-Life
8d.1 Describe any trends in recycling rates of the reference product.
Explain in the box below.
8d.2 Are any changes in waste handling or disposal that is carbon related expected?
Explain in the box below.
Step 9. Statements
Step 9a. Uncertainty
Please estimate the level of uncertainty of the carbon reduction calculation that you have
supplied in answer to in this worksheet. Specify the sources of uncertainty in your data
gathering, handling, and calculations.
Uncertainty range
Main sources of
uncertainty in data (sales
data, LCA data, etc)
Explain sources of uncertainty in the box below.
Step 9b. Validity
All information contained in this quantification accounting is accurate to my knowledge. I
understand that the data will be assessed by a third party and will give them access to my data
as needed.
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Walmart Supplier GHG Innovation Program Guidance Document
Step 9c. Claims
I understand that Walmart may make public claims about the carbon reductions achieved
through this project. I also understand that Walmart will not sell, trade, retire, or otherwise
generate value from these claims beyond public announcement.
Name:
Signed:
Date:
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Walmart Supplier GHG Innovation Program Guidance Document
Attachment B. Facility/Process Carbon Reduction Worksheet
Instructions:
If you are submitting a project that relates to a carbon reduction from a Walmart supplier facility
or supplier process, please complete this worksheet. If your project relates to a carbon
reduction from a product, then please complete the Product Worksheet. Please see the
attached decision tree to see if your project qualifies before answering quantification questions.
Fill in all sections that are in gray. Instructions are provided in red throughout.
Walmart Information
Walmart Champion Name:
Email:
Phone:
Supplier Information
If multiple, please add additional contacts below.
Company Name:
Contact Name:
Email:
Phone:
Project Information
Project Name:
Walmart Supplier
Category:
Facility Name:
Facility Address:
Date Submitted:
Date of Implementation of
Project:
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Walmart Supplier GHG Innovation Program Guidance Document
Is the carbon
reduction at the
product or
facility/process
level?
PRODUCT
FACILITY / PROCESS
Was facility or
process improvement a direct result
of Walmart activity?
Is product newly
designed or
improved?
YES
NO
Did Walmart directly
influence the
development or
design or redesign?
YES
NOT
QUALIFIED
YES
YES
Did Walmart
influence increased
sales?
YES
QUALIFIED
Did Walmart
influence energy
management?
QUALIFIED
NO
QUALIFIED
NO
NO
QUALIFIED
NOT
QUALIFIED
NO
NOT
QUALIFIED
Track 1
Track 2
Figure B. Project Qualification Decision Tree
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Walmart Supplier GHG Innovation Program Guidance Document
Qualification of Project
Step 1. Describe Facility or Process Carbon Reduction Project
1.1 Describe the facility/process carbon reduction project that was implemented.
Include a list of processes that were included, technologies that were employed, etc.
Step 1a. Facility/Process Improvement
1a. Did Walmart directly influence the facility or process improvement?
If yes, explain how in box below. Include dates of meetings, type of
influence, etc. Project qualifies. Please quantify reduction starting in step 2.
If no, move to step 1b.
Yes
No
Yes
No
Step 1b. Energy Management
1b. Did Walmart influence the energy management of the facility?
If yes, explain how in the box below. Include the type of influence.
Project qualifies. Please quantify reduction starting in step 2.
If no, project does not qualify.
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Quantification of Reductions
Step 2. Carbon Emissions Calculations Methodology
For each facility or process change, please explain the methodology employed.
2.1 What methodology was used to calculate the carbon emissions from the facility or process?
Please briefly describe the methodology and attach documentation
Step 3. Carbon Footprint Calculation
To calculate the reduction in the carbon emissions due to the process or facility project, Walmart
needs to understand the emissions BEFORE the project was implemented. In this section,
please identify carbon emissions from the facility or process before the project was
implemented, also called the reference point.
3.1 What time period is most appropriate to measure the
carbon emissions BEFORE the project was implemented?
List the start and end dates.
Start
End
3.2 Why was this time selected?
Explain rationale for choosing the start and end dates in the box below.
3.3 What time period is most appropriate to measure the
Start
End
carbon emissions AFTER the project was implemented.
List the start and end dates.
3.4 Why was this time selected?
Explain rationale for choosing the start and end dates in the box below.
3.5 What boundaries are included in the carbon footprint calculation for the reference point and
the improved process/facility?
Check all boxes yes or no
Yes
No
Scope 1 (Direct emissions)
Scope 2 (e.g., electricity)
3.6 Why was a scope excluded from your calculation?
For all “No” responses in 3.5, please explain why this was excluded.
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Walmart Supplier GHG Innovation Program Guidance Document
3.7 What are the carbon emissions per source?
Reference Period
Emissions Source
Metric tons CO2e
Onsite Fuels
Mobile Fuels
Refrigerants
Other Direct/Process Emissions
Purchased Electricity or Steam
Total
Total Carbon Reduction for all
phases
= total reference period – total
improvement period
Improvement Period
Metric tons CO2e
Step 4. Financial Value of Project
GHG reductions that come from Walmart scope 3-focused projects (not associated with a
product supplier) or from supplier facility-based projects require different financial accounting
than product GHG reductions. For this project, answer the following questions:
4.1 Were there fuel, electricity, or material savings at a
factory or facility level translated into cost savings through
industry averages?
List savings (e.g., average price of kWh x total kWh
saved).
4.2 Were there other financial savings?
Use historical cost and procurement data whenever
available.
Step 5. Technology Trends
For Walmart to assess how a facility or process improvement compares to trends in the industry
towards carbon efficiency, we must assess your response to several questions.
Please answer the following questions and provide any additional evidence available that
indicates that this project is improving beyond “business as usual.”
5.1 Are facilities recycling percentages expected to improve in your industry?
Explain and provide evidence.
5.2 Are transportation efficiency trends related to the submitted project expected for your
industry? Explain and provide evidence.
5.3 Is organic waste handling expected to change for your industry (e.g., movement toward
composting, biodigestion)?
Explain and provide evidence.
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Walmart Supplier GHG Innovation Program Guidance Document
5.4 Are manufacturing energy efficiency gains expected in your industry?
If so, explain and supply expected percent improvements over time and evidence.
5.5 Describe what general advances in material handling are occurring across the industry.
Explain and provide evidence.
Step 6. Statements
Step 6a. Uncertainty
Please estimate the level of uncertainty of the carbon reduction calculation that you have
supplied in answer to in this worksheet. Specify the sources of uncertainty in your data
gathering, handling, and calculations.
Uncertainty range
Main sources of
uncertainty in data
Explain sources of uncertainty in the box below.
Step 6b. Validity
All information contained in this quantification accounting is accurate to my knowledge. I
understand that the data will be assessed by a third party and will give them access to my data
as needed.
Step 6c. Claims
I understand that Walmart may make public claims about the carbon reductions achieved
through this project. I also understand that Walmart will not sell, trade, retire, or otherwise
generate value from these claims beyond public announcement.
Name:
Signed:
Date:
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