Walmart and Biodiversity Conservation (Part 2 of 2): Zero Net Deforestation

April 6, 2020 By Mark Aspelin

“Our world is increasingly transparent and we’re out to earn trust. When people shine a light on Walmart and see our decisions – the jobs we create, the activities in our supply chain – we want them to like what they see.”
—Doug McMillon, CEO of Walmart

To continue our discussion from last week’s post about Walmart’s approach to biodiversity conservation, today we’ll focus on Walmart’s goal of Zero Net Deforestation.

To determine how to tackle this goal, Walmart first reviewed studies and learned that certain agricultural commodities, such as palm oil, soy, cattle, and timber, were driving most deforestation in the world, so that’s where the company decided to focus its attention. Walmart then sought to address the major drivers of deforestation in its operation and supply chain for each of these commodities, which we’ll highlight below.

Palm oil. In 2010, Walmart set a goal to sustainably source any palm oil that is used in its global private-brand products. The company also encourages its national-brand suppliers to source palm oil from sustainable sources. By the end of 2015, 100% of Walmart’s private-brand palm oil was sourced sustainably in accordance with the certification standards of the Roundtable on Sustainable Palm Oil (RSPO), which included the use of the following supply chain models: Mass Balance, Segregated, Identity Preserved, and Credits. In 2017, Walmart decided to adopt a more rigorous approach of only using the RSPO criteria of Mass Balance or Segregated supply chain systems, or equivalent standards, by the end of 2020.

What the heck does all of that mean? Here are the RSPO definitions that should help make things a bit clearer:

  • Identity Preserved Supply Chain Model: Sustainable palm oil from a single identifiable certified source is kept separately from ordinary palm oil throughout supply chain.
  • Segregated Supply Chain Model: Sustainable palm oil from different certified sources is kept separate from ordinary palm oil throughout supply chain.
  • Mass Balance Supply Chain Model: Sustainable palm oil from certified sources is mixed with ordinary palm oil throughout supply chain.
  • RSPO Credits / Book & Claim Supply Chain Model: The supply chain is not monitored for the presence of sustainable palm oil. Manufacturers and retailers can buy Credits from RSPO-certified growers, crushers and independent smallholders. RSPO’s traceability system for certified palm products is called PalmTrace.

As reported in its 2019 Environmental, Social & Governance Report, the breakdown of Walmart’s Palm Oil supply chain models is as follows:

  • RSPO Identity Preserved: 0.02%
  • RSPO segregated or equivalent: 12.87%
  • RSPO Mass Balance: 47.38%
  • Palmtrace Credits: 39.72%

In other words, Walmart has some work to do in order to transition away from the use of Palmtrace Credits (~40% of its supply chain methodology in calendar year 2018) in order to accomplish its revised 2017 goal. As result, Walmart is now looking for ways to move towards sources of certified, sustainable palm oil that have been physically verified. The company is also determining how it can best support an industry-wide movement as the industry transitions to 100% traceability for sources of palm oil.

Beef. In 2016, Walmart achieved its goal to only source “sustainable beef” that is not associated with deforestation of the Amazon rainforest by getting 100% of its Brazilian beef suppliers to participate in Walmart’s Beef Risk Monitoring System. To monitor its supply of beef, Walmart created a geospatial monitoring system that tracks suppliers, volumes, and over 75,000 registered farm locations, and the data are combined with maps that show where deforestation is taking place. The tool then analyzes Walmart orders to ensure that no beef comes from deforested areas. Beef suppliers are trained to manage geographical information at their slaughterhouses and input the coordinates of their suppliers’ farms into the system. The company is now working to expand the program to include cow-calf operations to address the risk that cattle might be traded from high-risk ranches to approved ranches, and the risk that ranchers who contribute to deforestation may re-register their operations under different names. As the program expands, other sensitive biomes outside of the Amazon will be included, such as the Cerrado tropical savanna ecoregion of Brazil.

Soy. Walmart is working with its supply chain and the Consumer Goods Forum to acquire soy through deforestation-free channels. Walmart supports an indefinite extension for the Soy Moratorium in the Amazon region of Brazil, which has helped reduce the amount of Brazilian soy that comes from deforested areas from 30% to 1%. The company also supports the expansion of the Soy Moratorium to other parts of Brazil where a similar approach is needed.

Pulp and paper products. To address deforestation through logging for timber, Walmart is working to reduce packaging materials and ensure that pulp and paper products are purchased from sustainable sources. The company set a goal of zero-net deforestation associated with its private brand products and is encouraging its national-brand suppliers to set similar goals. Walmart uses a Sustainability Index to measure and track supplier performance based on the percentage of virgin fiber. For the calendar year 2018, the percentage of private-brand pulp and paper volume certified by the Forest
Stewardship Council, Programme for the Endorsement of Forest
Certification, Sustainable Forestry Initiative, or is using recycled content, was reported to be 91%.

To help promote transparency and traceability across its supply chains, in 2017, Walmart joined the World Resources Institute and 20 other companies to launch Global Forest Watch Pro. Global Forest Watch Pro is an online platform that provides companies, banks and other stakeholders with data and tools for monitoring global forest loss due to the production of key commodities such as palm oil, soy and Brazilian beef. The online platform’s algorithms leverage the use of cutting-edge satellite technology and cloud computing to provide real-time information about where and how forests are changing around the world.

I hope you enjoyed this two-part overview of Walmart’s approach to biodiversity conservation. I’ll be back next week with a new topic or case study that highlights the role of corporations in protecting our planet’s biodiversity.

Thanks for reading!

Mark

How Businesses Can Help Make Half-Earth A Reality: Reducing the Threat of Overharvesting

October 29, 2018 By Mark Aspelin

Part 5 of a 5-part series that is published on the E.O. Wilson Biodiversity Foundation and Half-Earth Project website at www.half-earthproject.org/news-notes

———————————————————–October 11, 2018

How Businesses Can Help Make Half-Earth a Reality: Reducing the Threat of Overharvesting

by Mark AspelinPart 5 of a 5-part series

How Businesses Can Help Make Half-Earth a Reality: Reducing the Threat of Overharvesting

October 11, 2018, by Mark Aspelin

Part 5 of a 5-part series

So far in this blog series, we’ve been looked at the role of corporations in addressing three major threats to biodiversity: habitat destruction, invasive species, and pollution. In this fifth and final post, we’ll explore another big biodiversity threat: overharvesting.

“Overharvesting” is a broad term that refers to the harvesting of a renewable resource at a rate that is unsustainable. The term can apply to plants, fish stocks, forests, grazing pastures, and game animals. The motivation behind hunting, fishing, and plant collection may be for food, economic reasons, cultural reasons, or sport. Regardless of the reason, overharvesting implies that changes need to be made to current harvesting practices or else animal and plant populations may not recover. The result can be species extinction at the population or species level, and major ecosystem disturbances due to imbalances in predator–prey relationships.

Unfortunately, we’ve seen many examples of overharvesting over the years—everything from passenger pigeons, tigers, rhinos, and certain species of fish. Let’s look at passenger pigeons as an example.

When famous naturalist and artist John James Audubon was on a trip to St. Louis, Missouri, he noticed a sky that was darkened by a large flock of passenger pigeons flying overhead. He described the flock as having no beginning and no end, and the flock continued as a steady stream for three days. As the story goes, Audubon started to count the number of pigeons that he could see in the sky, but he soon gave up. There were too many to count. Today, it’s quite easy to count how many passenger pigeons are in the sky: zero. They are extinct.

In the late 1700s and early 1800s, passenger pigeons were one of the most abundant bird species in the world, with an estimated population of three to five billion birds. That’s twice the number of people on Earth at the time. In only 100 years, passenger pigeons were wiped out of existence, primarily through hunting.

The last verified record of a wild passenger pigeon was in March 1900, when a boy in Pike County, Ohio, shot the bird because it was eating corn at his farm. That left just a few remaining passenger pigeons in a single captive flock at the Cincinnati Zoo. Breeding attempts failed, and the flock dwindled until there was only one left: Martha. A US$ 1,000 reward was offered to anyone who could find a mate for Martha, but none was found. On September 1, 1914, Martha—the last known passenger pigeon—died at the Cincinnati Zoo at the age of 29. Martha’s body is periodically on display at the Smithsonian Institution in Washington, DC, and a memorial statue of Martha can be found at the Cincinnati Zoo aviary.

Even if you consider pigeons to be flying rats, the story of the passenger pigeon’s demise still represents a failure of epic proportions when it comes to fulfilling our responsibility to be good stewards of the environment.

In the 1800s, the idea that a species could be hunted to extinction was a foreign concept to most people. Now that we’re in the 2000s, I would like to be able to say that we’ve learned our lesson; unfortunately, we’re not quite there yet. Overharvesting is alive and well. For example, unsustainable fishing practices, such as bottom trawling and blast fishing, are still practiced today, and we’ve seen significant declines in several commercial fish populations, such as Atlantic halibut, to the point where their survival is threatened. Tigers and rhinos have been overhunted, primarily for traditional medicines derived from various parts of these magnificent animals. While it’s illegal to hunt and kill tigers and rhinos, the economic incentive from Asian medicinal markets is so great that the hunting of these endangered animals continues.

Thankfully, we may be rounding the corner for some charismatic animal species, such as the tiger. For the first time in more than a century, the world population of tigers is on the rise. The number of tigers has increased from 3,200 to 3,890 from 2010 to 2016. However, there’s still much work to be done to keep this trend heading in the right direction.

Let’s not forget about plants. Roughly 75% of the top 150 prescription drugs in the United States are based on natural sources, and over 25% of prescribed medicines in developed countries are derived from wild plants. We’ve also seen a multibillion-dollar boom in the herbal market, fueled largely by a desire to find “natural approaches” to medicine. In addition, up to 80% of people in developing countries are totally dependent on herbal drugs for their primary healthcare. When you add all of this up, it’s no surprise that medicinal plants are facing significant overharvesting pressures. Roughly 15,000 species of the 50,000 to 80,000 flowering plant species used for medicinal purposes worldwide are threatened with extinction from overharvesting and habitat destruction.

What Can Corporations Do?

The best way that most companies large and small can help prevent overharvesting is to “green” their supply chain. “Greening the supply chain” adds an environmental lens to traditional supply-chain management practices. Greening the supply chain is also an effective strategy for combating other biodiversity threats, such as habitat destruction and pollution.

Activities to green the supply chain may include a variety of environment-focused actions that guide a company’s interactions with its various suppliers, including:

  • Setting environmental standards that all suppliers must meet.
  • Creating performance goals, metrics, and supplier scorecards that are used to monitor and evaluate supplier performance over time.
  • Establishing a supplier-audit program to verify that suppliers have successfully implemented processes that are effective in reducing environmental impacts.
  • Improving business processes to reduce environmental impacts.
  • Identifying alternative materials that have a smaller environmental footprint.
  • Partnering with government agencies, industry groups, and nongovernment organizations (NGOs) to look for new ways to improve environmental performance.

Greening the supply chain is definitely a profitable-conservation strategy—just ask Dell Computer. Dell holds supplier-innovation summits to generate new ideas for improvements across all areas of the supply chain. For example, one supplier-innovation summit generated the idea that it can remove toxic paints from some of its computers and replace it with a much safer film covering.

Another Dell supplier came up with the idea to mix in straw grass with wood-based pulp for some of Dell’s corrugate boxes. Straw grass is a more quickly renewable resource compared to trees. In addition, straw grass is burned as a farming waste product in parts of China. Rather than burn the straw grass, it could be utilized in the corrugate boxes. Because of this suggestion, Dell now uses a mix of 30% straw grass pulp in some of its boxes. Dell’s innovation program has reduced supply-chain costs by roughly US$ 100 million annually for the past two years.

Dell is not alone. In 2013, Walmart announced that it saved US$ 150 million from supply-chain sustainability efforts in that year alone. General Motors established a reusable-container program with its suppliers and was able to reduce disposal costs by US$ 12 million while reducing environmental impacts. Texas Instruments saves about US$ 8 million per year through supply-chain management practices, such as reducing source materials and reducing and reusing packaging.

As you can see from the examples above, greening your supply chain can add real value to your business by cutting costs, driving innovation for new products and processes, improving customer and consumer perception of your company, and helping you meet or exceed environmental regulations and performance targets.

Greening the supply chain isn’t the only strategy that corporations pursue when it comes to preventing overharvesting. Some companies are leveraging their technology to help prevent hunting of endangered wildlife. Let’s look at Cisco Systems as an example.

Cisco Systems has partnered with Dimension Data on a Connected Conservation initiative to track rhino poachers at a game reserve in South Africa. Cisco and Dimension Data are using seismic sensors, drone cameras, thermal imaging, biometric scanning, and networking technology to track the movements of all humans who enter the reserve grounds. Park rangers use these new tools in combination with traditional sniffer dogs and trained soldiers on the ground to catch and deter poachers while minimizing disturbances to the endangered rhinos. The results have been impressive so far. The Connected Conservation initiative has been successful in reducing rhino poaching at the South African reserve by 96%.

In the future, this approach may be leveraged to protect other endangered species throughout the world. The main obstacle that prevents the spread of this technological approach is the US$ 1.5 million-per-year cost of the system. More and more companies are leveraging their products and technologies to develop solutions that directly help in the fight against overharvesting.

Parting Words

I hope you’ve enjoyed this blog series highlighting four of the major threats to biodiversity, and the role that businesses play in helping us get to Half-Earth.

Before I sign off, I want to provide you with one last reminder of the upcoming Half-Earth Day event that will be held on October 22, 2018 at the American Museum of Natural History in New York City. This year’s event includes a “Learning from Local Stewards” panel discussion highlighting key learnings from in-country indigenous and local community leaders, as well as a panel called “Half-Earth: How to Save the Natural World” that will be moderated by The New York Timescolumnist Thomas L. Friedman and feature E.O. Wilson and legendary recording artist Paul Simon. To learn more about Half-Earth Day, visit http://www.half-earthproject.org/half-earth-day. It’s going to be a great event.

Thanks for taking the time to read this blog series, and I look forward to meeting you at Half-Earth Day!