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

Walmart and Biodiversity Conservation (Part 1 of 2): Acres for America


March 30, 2020 BY MARK ASPELIN

“The doubters got on board quickly when they saw that our P & L could benefit while we were doing good work for the environment. A constant theme for us in engaging our associates and stakeholders has been shared value: the need to integrate sustainability into business, not treat it as a separate effort, and to ensure we deliver business value as well as value for the environment and society.”
—Doug McMillon, CEO of Walmart

After taking a break from writing blog posts for awhile, I’ve decided to resume writing once again, although I’ll primarily be posting to my Corporationsforbiodiversity.org site.   

I’ll be deviating a bit from the format of my earlier company profiles. Rather than cover every strategy related to biodiversity for each company, I’ll instead focus on just one or two strategies that have the most direct, tangible benefit to biodiversity / wildlife conservation, or strategies that are relatively unique.  I’m hoping that strategy will enable me to get a new post out each week.  Let’s start things off by looking at Walmart’s approach to biodiversity.

With 275 million weekly customers, it’s a safe bet that most of us have been to Walmart at one time or another. Walmart is the largest company in the world, with over US$ 514 billion in total revenue, and a staggering 2.2 million associates spread across 11,300 stores in 27 countries. The Walmart brand includes Walmart Supercenters, Walmart Neighborhood Markets, Sam’s Club (United States, Mexico, Brazil, and China), ASDA (England), and Seiyu (Japan). This behemoth’s supply chain includes over 100,000 suppliers from around the world … no small task to manage. Walmart clearly posts some jaw dropping figures in terms of it’s scale, but how does Walmart stack up in the world of biodiversity conservation?

Pretty darn good! While Walmart neglects to mention the word “biodiversity” in its 2019 Environmental, Social & Governance Report, the Company is doing a lot a great work the directly and indirectly benefits biodiversity. In fact, Walmart has become a leader in many aspects of corporate sustainability. So much so, that I ended up dedicating a whole chapter to Walmart’s conservation efforts in my book Profitable Conservation: Business Strategies that Boost Your Bottom Line, Protect Wildlife, and Conserve Biodiversity.

In the case of Walmart, it has a variety of robust environmental goals associated with climate change and waste, such as the following:

  • By 2030, work with suppliers to reduce or avoid carbon dioxide equivalent emissions from by 1 gigaton from global value chains.
  • Be powered by 50% renewable sources by 2025.
  • Achieve zero waste to landfill from its own operations in key markets, including the U.S., U.K., Japan and Canada by 2025 in accordance with the Zero Waste International Alliance guidelines.
  • Achieve 100% recyclable, reusable or industrially compostable packaging in all Walmart private-brand products by 2025.

… and the list goes on.

The two goals that I’ll focus on in this post and next week’s post directly aim to address the biodiversity threat of habitat destruction / fragmentation:

  • Conserve 1 acre of land for every acre developed by Walmart stores in the U.S.
  • Achieve zero net deforestation by 2020.

This week’s post will address Walmart’s goal to conserve one acre of land for every acre developed by Walmart stores in the United States. To meet this goal, Walmart has adopted a voluntary compensatory strategy through its Acres for America Program. Here is some background on that Program.

In 2005, Walmart partnered with the National Fish and Wildlife Foundation (NFWF) to establish the Acres for America program “to conserve lands of national significance, protect critical fish and wildlife habitat, and benefit people and local economies.”

Acres for America supports biodiversity and natural-resource conservation through four program priorities:

  1. Conserve critical habitats for birds, fish, plants, and wildlife.
  2. Connect existing protected lands to unify wild places and protect migration routes.
  3. Provide access for people to enjoy the outdoors.
  4. Support local economies that depend on forestry, ranching, and wildlife.

The results have been impressive. Walmart started with a goal to conserve one acre of wildlife habitat for every acre of land developed by Walmart stores but has achieved closer to a 10:1 ratio of conservation to development.

To provide an example of how Walmart and the NFWF leverage those funds each year, let’s look at how those funds were allocated in 2019. In November of 2019, the Acres for America program awarded $3.6 million in grants, and leveraged an additional $70.2 million in matching contributions, to conserve 70,300 acres in Colorado, New Mexico, New York, Oregon, Washington, Iowa, and Kansas. The funds were allocated to support the following seven projects:

  • The Trust for Public Land and The Nature Conservancy will permanently conserve a 19,200-acre mountain property (Fisher’s Peak Ranch) located south of Trinidad, Colorado, which will become Colorado’s newest State Park. The property links intact habitat between the Eastern Plains of Colorado and the Western Slopes of Colorado and the Rocky Mountains. Grant amount $650,000.
  • The Iowa Department of Natural Resources will protect an 834-acre tract of untilled prairie and oak woodland in the Loess Hills of western Iowa just outside Sioux City. This area will become a State Wildlife Area within a 10,000 acre conservation area, ensuring that the grassland and savanna woodland species are properly managed. Grant amount $270,000.
  • Ranchland Trust of Kansas will partner with the USDA Natural Resources Conservation Service, state and local partners to create a perpetual conservation easement on 9,250 acres of grasslands on the Ballet Ranch in the Red Hills ofKansas. The conservation easement will provide suitable habitat for species of concern, such as cave-dwelling bats, lesser prairie-chicken, plains minnow, longnose snake, and numerous grassland-obligate and migratory birds, while sustaining local economic viability as a working cattle ranch. Grant amount $650,000.
  • In eastern New Mexico, the Trust for Public Land will work with the Bureau of Land Management to acquire an 8,914-acre Cañon Ciruela property as an addition to the Sabinoso Wilderness, while will result in over 30,000 acres of protected wilderness. Grant amount $450,000.
  • In New York, the Nature Conservancy will establish a freshwater preserve at Follensby Pond in Adirondack Park, protecting 14,700 acres that are adjacent to the 275,000 acre High Peaks Wilderness Area. Grant amount $650,000.
  • In Oregon, the Trust for Public Land will work with federal, state and local partners to acquire the 7,500-acre Spence Mountain property on the shore of Upper Klamath Lake, providing critical fish and wildlife habitat. Grant amount $435,000.
  • In Washington, the Columbia Land Trust, in partnership with the Yakama Nation and federal and state agencies, will acquire 9,900 acre Mount Adams-Klickitat Canyon Forest in an effort to protect and restore the Wild & Scenic Klickitat River and its watershed. The canyon will connect federal and tribal protected habitat with thousands of acres of state and private conservation lands, providing critical habitat for 36 federally and state-listed wildlife species. Grant amount $500,000.

Walmart’s Acres for America program should not be confused with a traditional biodiversity offset program. Walmart’s voluntary compensatory action approach differs from a formal biodiversity offset in one important way: there’s no link between the actual biodiversity impacts of the company’s development activities and the biodiversity gains from purchasing land for conservation.

In other words, biodiversity offsets take the Walmart “acres-for-acres” conservation approach a step further by formally requiring no net loss of the biodiversity value of the land. Ideally, the goal is to obtain a positive net gain of biodiversity value from the transaction. The downside of biodiversity offsets is that they are more complex and expensive to implement. The costs and resources required to do a biodiversity offset can make traditional philanthropy and “acres-for-acres” conservation approaches more appealing and a better fit with stakeholder expectations, depending on the company, industry, and location.

In the case of Walmart, it’s very likely that the conservation value of the land purchased through the Acres for America program is greater than the conservation value of the land that Walmart is developing for its stores. As a result, the company chooses not to assess the type, scale, or amount of biodiversity lost and gained from each development project and land-conservation purchase. Instead, Walmart simply looks at the overall footprint of land developed for new stores and ensures that the company protects at least that many acres of high value habitat for conservation.

The results tell a compelling story. As of 2019, the Acres for America program has protected nearly 1.5 million acres, bringing it closer to its goal of conserving 2 million acres by 2025, and it has become the leading public-private land conservation partnership in the United States. It’s an effective approach that many other companies could benefit from imitating.

Well that’s all for today. Next week, we’ll look at another effective strategy that Walmart is putting into place that addresses the biodiversity threat of habitat loss: zero net deforestation.

Thanks for reading!

Mark