Here’s What Happens When Companies Track Emissions

Ten years ago, as part of a sustainability initiative, Walmart decided to take a look at its greenhouse gas emissions. The retail giant not only tallied up the carbon footprint of its trucking fleet and supersize stores, it also set out to quantify the greenhouse gas emissions associated with the countless products offered on its shelves.

With the help of the Environmental Defense Fund, the company calculated that these goods accounted for the vast majority of its emissions — between 90 and 95 percent, says Jenny Ahlen, a supply chain expert at EDF who works with Walmart.

Armed with information about the sources and sizes of its supply-chain emissions, the company vowed to reduce them by the equivalent of 22 million tons of carbon dioxide by 2015. Walmart recently announced that it met and surpassed that goal by implementing a number of measures, from increasing the energy efficiency of household products like lightbulbs to reducing the amount of food wasted in processing, in transportation and at stores, Ahlen says.

While critics say Walmart still has a long way to go to minimize its climate impacts, its success in reducing its supply chain emissions illustrates the idea that “to measure is to manage,” says Dexter Galvin of CDP, a non-profit organization that collects corporate climate information. That mantra embodies the rationale behind greenhouse gas accounting, which has become increasingly common in the private sector, especially in the U.S. and Europe.

Under current regulations, most companies don’t have to reduce their emissions, or even disclose them.  But many are voluntarily scrutinizing their climate footprint anyway, often at the request of investors or corporate customers, says William Paddock of WAP Sustainability, a consulting firm that helps companies with the task.

The methods and results can vary, but the rise of greenhouse gas accounting has spurred more and more companies to set goals for reducing their emissions.  Coca-Cola, for instance, aims to slash its emissions one-fourth by 2020, the same year by which Unilever — one of the largest consumer goods companies in the world — aims to cut emissions in half.  These ambitious goals have bolstered hopes that corporations might help lead the way on climate action.

Bedrock For Change
As financial accounting does with money, greenhouse gas accounting involves summing up all the emissions released by an entity, from a single company to an entire country.  In the U.S., for instance, the Environmental Protection Agency conducts an annual inventory of greenhouse gas emissions across all sectors of the economy.  The accounting captures everything from the CO2 belched out of coal-fired power plants, to the methane produced by cows, to the nitrous oxide released by cropland used to grow cotton for clothing.

Such accounting of country-level greenhouse gas emissions and reduction targets will be critical to the success of the Paris climate accord, signed by 195 countries late last year.

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