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Wal-Mart Joins Fray
In Carbon Profiling

Jim Prevor’s Perishable Pundit, September 25, 2007

It is no surprise that Tesco in the UK was already asking U.S. exporters to do it; now Wal-Mart is asking suppliers of select items to ascertain the amount of energy they use and their total carbon footprint:

WAL-MART TO LOOK AT SUPPLIERS’
ENERGY EFFICIENCY

Wal-Mart Stores Inc. has formed a partnership with the Carbon Disclosure Project to look for ways for its suppliers to better manage their energy efficiency, as part of its environmental push, the company said on Monday.

Under the partnership with the not-for-profit organization, which collects greenhouse gas emissions data from large companies, Wal-Mart will measure the amount of energy used throughout its supply chain, and use the method on a group of its suppliers to look for ways to make procurement, manufacturing and distribution more energy efficient.

The world’s largest retailer said it will kick-start the plan with a pilot group of seven commonly used products: DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda.

Suppliers will be encouraged to monitor and manage their greenhouse gas emissions and reduce Wal-Mart’s “total carbon footprint," John Fleming, Wal-Mart’s chief merchandising officer, said in a statement.

“This is an important first step toward reaching our goal of removing nonrenewable energy from products that Wal-Mart sells,” Fleming said.

Wal-Mart, under the Sustainability 360 plan, which it unveiled earlier this year, has set a goal of one day using only renewable energy and creating no waste, challenging its suppliers, customers and employees to do the same.

As part of the plan, it has constructed experimental stores to test ways to conserve water or electricity, and will ask its electronics suppliers to fill a scorecard to evaluate their products based on energy efficiency and durability, starting next year

This is one of those things that, used properly, can be helpful. After all, studying where and how one uses energy is the same as studying how one spends money.

The dangers are two-fold:

First, it must be kept in mind that all these studies depend on many subjective decisions. It is not obvious or easy to know how the fuel used by a boat should be allocated to different products. By weight? By volume? How does one calculate an issue such as if a factory has been built in a particular place to take advantage of a lot of empty backhauls?

Because of the inherent subjectivity of these decisions, the process is prone to abuse, and that abuse must be guarded against.

Second, reducing energy use is not inherently good. If you spend more money to reduce energy use than it is worth, you make the world a poorer place. Then, as we discussed here, you will make the world less able to deal with the consequences of global warming.

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