Selling America On Its Ambitious Sustainability Initiative With Walmart’s Zach Freeze

It’s one thing to be an organization looking to incorporate sustainability practices into your own operations. But it’s an entirely different story when you are a ubiquitous retail operation with a goal of enrolling pretty much every organization in your supply chain to become more sustainable as well.  

I was quite impressed when I learned of Walmart’s “Project Gigaton” initiative — which has actually inspired some similar programs here at Convoy. I couldn’t wait to sit down with Zach Freeze, the Senior Director, Strategic Initiatives, Sustainability at Walmart, which just so happens to be the largest retailer in the world.

Zach explained to us what Project Gigaton entails, what the program’s sustainability goals are, how it impacts everyone who does business with or works at Walmart, and why they care so much about making Project Gigaton a success. A quick summary of our conversation follows. 

• Zach’s Focus On Sustainability At Walmart: My responsibilities are to help guide the company on our objectives related to sustainability and specifically with the climate, which includes our scope 1, scope 2, operational emissions, as well as our scope 3, and our work on climate within the supply chain and our suppliers. We have a program called Project Gigaton which engages and spurs action on reducing emissions with our supply chain and also addresses waste. Our work on zero waste involves our own operations by 2025 as well as taking waste out of our supply chain and our product chains. Bottom line: what can we do to minimize packaging, design for profitability, and ultimately get to zero plastic waste? (0:55)
• How Project Gigaton Came To Be: As a retailer, our models estimate roughly 90-95% of our emissions footprint comes from scope 3 — the products we buy and sell and the use of those products in a customer’s home. It’s very important for us to make sure we’re doing everything we can. Project Gigaton is designed to help suppliers out on that journey, to encourage them to make bold commitments, start taking action, and report and measure progress. We launched Project Gigaton in 2017 and we’ve made great progress with over 2,300 suppliers engaged. To date, we’re at 230 million metric tons along our goal of eventually getting to 1 billion metric tons (a gigaton) avoided by 2030. (2:08)
• How Project Gigaton Operates: Companies are at all stages — some are just getting started while others have long established and assigned targets they’re actively pursuing. Walmart has suppliers at every step along this journey, and we want to engage with them wherever they are in order to move them up the curve. We want to make it really simple to get started and then push suppliers who are doing great work to move even faster and farther. Project Gigaton is designed for us to activate with any supplier at any level to begin and understand the business case and keep it front and center as to why it matters to Walmart. We are typically one of the larger customers for these suppliers, so we want to make sure they understand it is very important for us and for us to help them as well. We want to provide resources and collect everything we can and we learn from our environmental NGO partners like World Wildlife Fund or Environmental Defense Fund and, in turn, translate these learnings into actions on things like reducing food waste, reducing packaging, reducing energy use and making that conversion to greenhouse gas and making it really simple to use, easy to engage with, and incentivizing and encouraging companies to do more. (3:47)
• How Walmart Measures Progress On Project Gigaton: We’ve increased the number of suppliers who get involved year over year. Usually what we see is companies getting started with any sort of commitment or any type of goal, and then they start taking action. The next year they are ready to report. And the next year they report more. We began with around 20 million metric tons in year one and then we picked up around 70 million metric tons in year two. And this last year, we got close to approximately 130 million metric tons. We want to see things happen faster and we know it’s very important for us to make things easier, to translate some of the emerging signs to show this is happening and here are the actions suppliers can take. This is what we feel our role is. We really want to create this initiative as a way to applaud the work that’s being done, encourage more activity, and bring some of these very important climate actions which need to happen at every stage of a supplier’s business, whether it is transportation or even designing products so they use less energy in a customer’s home. Tying all of that to sustainability and climate is a very top priority for Walmart. (5:30)
• Walmart’s Current Sustainability Efforts: I will say 2020 was a big year for Walmart. Obviously it didn’t go as planned for most companies and I know all of us had setbacks. What was really cool was to see continued leadership and action on climate week in September aligned with what traditionally was Climate Week. This really big event in New York obviously went virtual, but we were a key part of the sessions this last year purposefully, because we really wanted to continue to signal the importance that climate is still a very important area of work which Walmart and others need to continue to take action on. We also set a new goal and new targets on becoming a regenerative company which was really exciting to be able to define and lay out our strategy on it and it was led by our commitment to zero emissions in our scope 1 and scope 2. Alongside Project Gigaton and with our existing science-based target, we doubled down and aligned with the 1.5-degree targets of the science-based target initiative and committed to zero emissions. This applies to our own operations so that’s electricity use, things like refrigeration, our truck fleet, etc. Getting to zero between now and 2040 is a really big bold goal which we announced and we are actively working toward this and it was a really big deal. At the same meeting we also announced a goal on the nature of sustainably managing, conserving, or restoring 50 million acres between now and 2030 and one million square miles of ocean. Taking nature into this purview as well and making sure that we work climate and nature together to link those in a way that signals to our business and with our suppliers the importance of this initiative and why we have set a very ambitious commitment that we’re actively working on as we speak. (7:32)
• How Sustainability Shows Up At Walmart: It is something we’re trying to embed within every role at Walmart. We want everyone to feel a part of this goal because it’s going to take all of us to really be able to deliver this ambitious commitment. We really want to engage with every area of the company to instill ownership of the goals and the work that needs to happen. Every part of our company needs to get involved including getting to zero waste in operations, ensuring we’re on our emissions reduction track, and procuring more renewable energy. Even on the buying side, getting buyers engaged, thinking about the product life cycle and the supply chain it takes to put that product on our shelf. Walmart has this commitment to everyday low cost — which has really been a foundational principle of the company — and we’ve really taken that and talk about it now as true everyday low cost. So, the true cost of that product takes into consideration what we buy and source. We work with our suppliers to minimize that as much as we can and keep all the externalities in the context to make sure we stay focused on getting to zero waste and zero emissions and be able to be very proud about the products we sell and what we put on our shelves. Ultimately, we want to build trust with our customer. We want our customer to feel really good about coming into Walmart and buying any product they need, and we want to do that in a sustainable way. (9:49)
• What Walmart Gets Out Of Its Commitment To Sustainability: We see it as an opportunity because we know our customers care about sustainability and we know our customers care about climate and plastic waste elimination. It’s very connected to our approach of how to engage with the customer and what we view as long-term success. If you think about the definition of sustainability, we have to be able to continue to be able to put products on our shelves in the years to come and we depend on the planet to do that. We have to make sure we’re good stewards to the planet, and we’re taking care of that. We’re putting people and the planet first. And that’s intrinsically tied to our business mission. Our goal as a company and our tagline is very closely associated with that. Walmart sells products that are good for people, good for the planet and it goes all the way up to the top. Our CEO believes it and understands it and recognizes the connection to what he calls “shared value”, which is really about taking all stakeholder perspectives into consideration to make sure that we deliver for the customer, the investor, the associate, and the shareholder. We feel all of this can and should be done in order to be a truly sustainable company. (12:14)
• What Most Walmart Customers Probably Don’t Realize Is Going On Behind The Scenes: We’re doing a lot of great work to improve the manufacturing and sourcing of our products, including things like working very hard to improve the recyclability of packaging. Walmart is challenging and working with our supplier partners on improving the ingredients, the way things are made and sourced, and even the store itself. For example, we have moved to extremely energy efficient lighting and this is an example of how we are constantly looking at how we can improve our business while keeping our customer in mind. We want them to trust that when they select Walmart as a retailer by either walking into a store or going online, they are getting a product and a service which keeps sustainability at the forefront. We know we have to continue to earn our customer’s trust, and it’s going to be harder and harder every year, so it is up to us to really continue to improve every area of our business in order to do that. (13:56)

TRANSCRIPTION

Jennifer Wong: Today we have Zach Freeze joining us, the senior director of strategic initiatives for sustainability at Walmart. 

Zach Freeze: Hello, Jennifer. 

Jennifer: What are your responsibilities in leading the strategic initiatives around sustainability at Walmart? 

Zach: Absolutely. And it’s a pleasure to be here and glad we could set up the time to talk. That’s a mouth full that title that you just mentioned so strategic initiatives in sustainability, my responsibilities are really to help guide the company on our objectives related to sustainability and specifically with the climate, which includes our scope 1, scope 2, operational emissions, as well as our scope 3 and our work on climate with supply chain and our suppliers and we have a program called Project Gigaton, that does just that to really engage and spur action on reducing emissions with our supply chain and then on the flip side also work on waste. So, our work to work on zero waste in our own operations by 2025 and take waste out of our supply chain, out of our product chains. So, what can we do to minimize packaging, design for profitability and ultimately get to zero plastic waste? 

Jennifer: Tell me about how Project Gigaton is going. It’s so critical for companies to start engaging their supply chain partners to make progress against their sustainability goal when often times [2:00] scope 3 emissions are the largest portion of that.

Zach: It is, and as a retailer it is very front and center and very important for us. And, you know, our models estimate roughly 90-95% of our emissions footprint comes from scope 3, comes from the products that we buy and sell and the use of those products in a customer’s home. So, it’s very important for us to make sure we’re doing everything we can. So, Project Gigaton is designed to help suppliers out on that journey, to really encourage them to make bold commitments and to start taking action and to report and measure progress, and that’s what we’ve been doing over the last few years. We launched the program in 2017 and we’ve made great progress. We have over 2300 suppliers engaged and so far to date, we’re at 230 million metric tons along our goal of eventually getting to 1 billion metric tons avoided by 2030. And so, we’ve got 10 years left to really continue to drive action and hopefully, you know, we’re seeing just higher levels of ambition with climate action. Climate is such an important topic right now and it needs to be. And so, we want to make sure to keep that top priority for our business as well as our supply chain. 

Jennifer: With Project Gigaton, you’re managing all and all of your suppliers and vendors, what’s the most surprising thing you’ve learned so far in really pulling together a program like this and being able to execute in your 3 years now? And I would say, for Convoy, we’ve started to work with some of these programs as well with some of our customers. But they’re really just getting started so I’d be curious to hear what you’ve learned so far. 

Zach: I think that’s a very important point is that companies are at all stages here, you know. And some companies are just getting started. Some companies have long established assigned space targets that they’re actively pursuing and so with a company like Walmart, we have suppliers at every level [4:00] of that journey. And so, we want to engage with them wherever they are in order to move them up the curve. And so, we want to make it really simple and easy to get started and then we really want to push suppliers that are doing great work to move even faster and further. So, the program is really designed to activate with any supplier at any level to get started and making that business case and keeping it very front and center as to why it matters to Walmart. We are typically one of the larger customers for these companies, these suppliers. So, we want to make sure that they understand that its very important for us. It’s a very important topic and we want to help. We want to provide resources and collect everything we can and we learn from our environmental NGO partners like World Wildlife Fund or Environmental Defense Fund and put that in a simple way to translate actions on things like reducing food waste, reducing packaging, reducing energy use and then making that conversion to greenhouse gas and how simple that sounds, but just, you know, making it really simple to use, easy to engage with, and then, you know, incentivizing and encouraging companies to do more. 

Jennifer: What does your team scorecard look like? How do you measure progress for a massive project like this? 

Zach: We’ve increased the number of suppliers year over year to get involved. And usually what we see is, you know companies get started with any sort of commitment, any sort of goal, and then they start taking action. And then the next year they’re ready to report. And the next year they report more. And so, we’ve seen this growth which is fantastic to see. You know, we started I think around 20 million metric tons in year one and then we picked up around 70 million metric tons in year two. And this last year, we got close to I think 130 million metric tons. And so, [6:00] just to see it continue to grow is very important for us and we’re not really satisfied with that progress. We want to see things happen faster and we know we’re very important in that space as well to make things easier, to translate some of the emerging signs that this is happening to what actions suppliers can take. So that’s what we feel our role is. We really want to create this platform and this initiative as a way to applaud the work that’s being done and encourage more activity, and just bring some of these very important climate actions that need to happen at every stage of a supplier, you know, be it transportation, or even designing products so they use less energy in a customer’s home. And just tying all of that to sustainability and climate and again, a very top priority for Walmart. 

Jennifer: What project or initiative are you most excited about right now? 

Zach: Well, its…our company is doing a lot and it’s great to be a part of this world right now because, again, its just so important and I know there’s a lot to do and that’s one thing that is constantly on our minds. There’s so much that we need to do to be able to achieve the ambitious goals that we set. I will say 2020 was a big year for Walmart, you know, obviously it didn’t go as planned for most companies and I know all of us had setbacks and what was really cool was to see a continued leadership and action on climate week in September aligned with what traditionally was climate week. A really big event in [8:00] New York and obviously that meeting went virtual. But we were a key part of that sessions this last year purposefully because we really wanted to continue to signal the importance that, you know, climate is still a very important area of work that Walmart and others need to continue to take action on. And we actually set a new goal, new targets on becoming a regenerative company. Which was really exciting to be able to define and lay out our strategy on it and it really was led by our commitment to zero emissions in our scope 1 and scope 2. And so, alongside Project Gigaton and with our existing science-based target, we doubled down, we went, you know, aligned with the 1.5-degree targets of the science-based target initiative and committed to zero emissions. And that’s our own operations so that’s electricity use, that’s things like refrigeration, our truck fleet. So, getting to zero between now and 2040, that was a really big bold goal that we announced and so we are actively working towards that and so that was a really big deal. Then at the same meeting we also announced a goal on nature of sustainably managing, conserving, or restoring 50 million acres between now and 2030 and 1 million square miles of ocean. So, taking nature into this purview as well and making sure that we work climate and nature together to link those in a way that signals to our business the importance and with our suppliers, but really setting a very ambitious commitment that we’re actively working on as we speak. 

Jennifer: How does sustainability show up across Walmart? What does it look like or feel like if you’re an employee at Walmart? How would I be engaged with sustainability? 

Zach: Yeah, that’s something we’re trying to embed with [10:00] any role at Walmart. We want everyone to feel a part of this goal because it’s going to take all of us to really be able to deliver this ambitious commitment. And so, we’ve got a very purposefully, a very small sustainability team that I have the pleasure to work with, but we really want to engage with every area of the company to instill that ownership of the goals and the work that needs to happen because it is, its every part of our company that needs to get involved. Operations, getting to zero waste, and ensuring we’re on our emissions reduction track, we’re procuring more renewable energy. And even on the buying side, getting buyers engaged, thinking about the product life cycle and the supply chain that it takes to put that product on our shelf. And at Walmart, we have this commitment to everyday low cost, which has really been a, really a foundational principle at Walmart and we’ve really taken that and really talk about it now as everyday low true cost. So, the true cost of that product and taking that into consideration to what we buy and source. So, working with our suppliers to minimize that as much as we can keeping all the externalities in the context to make sure we stay focused on getting to zero waste and zero emissions and being able to be very proud about the products that we sell and that we put on our shelf because ultimately, we want to build trust with our customer. We want our customer to feel really good about coming into Walmart and buying any product that they need, and we want to do that in a sustainable way. So that’s going to take everyone in the company to make that happen, from the marketers, to the packaging teams, to the product compliance teams, logistics groups, so we’re all very focused on delivering those commitments. 

Jennifer: How does Walmart value sustainability? You’re clearly spending a lot of effort and resources investing in sustainability. What does Walmart get out of it? 

Zach: I think we certainly see it as an opportunity because, you know, we know our customers care about sustainability and we know our customers care about climate, they care about plastic waste elimination and so it’s very connected to our approach of, you know, how to engage with the customer and what we view as long term success. And I really think that if you think about the definition of sustainability, we have to be able to continue to be able to put products on our shelf in the years to come and we depend on the planet to do that. So, we have to make sure we’re good stewards to the planet, and we’re taking care of that. We’re putting people and the planet first. And that’s intrinsically tied to our business mission and, you know, our goal as a company and our tagline even is, you know, very closely associated with that. You know, sell products that are good for people, good for the planet and so it’s all the way up to the top. Our CEO believes it and understands it and understands the connection to, what he calls shared value, which is really about taking all stakeholder perspectives into consideration to make sure that we deliver for the customer, the investor, the associate, the shareholder, and all of that, we feel can be done and should be done in order to be a truly sustainable company.

Jennifer: For the average customer walking into one of your stores, what is something that they might not know about sustainability at Walmart? 

Zach: I think what’s really exciting is that there is a lot of great work that is going on behind the scenes. And a lot of great work that we’re doing [14:00] to improve the manufacturing and the sourcing of our products and even things like recyclability of packaging, working very hard to improve that. Challenging and working with our supplier partners on improving the ingredients, the way things are made and sourced, and even the store itself, right. The lighting, you know, the majority has gone to extremely energy efficient lighting and so, we’re constantly looking at how do we improve our business keeping our customer in mind. We want them to trust, when they walk in that store, or they go online, or they select Walmart as a retailer that they’re getting a product and a service that keeps sustainability at the forefront. And we know we have to continue to earn that customer’s trust. And its going to be harder and harder every year and so its up to us to really continue to improve every area of our business in order to do that. 

Jennifer: That’s incredible. Well, thank you again, Zach for joining us today. 

Zach: Absolutely. Thanks for having me, Jennifer.