And by improving the energy efficiency of their operations, they can save some money in the process, according to Rob Walton, a previous chairman of retailing giant Walmart. “A lot of discussions out there are about government regulations, and they are important,” Walton wrote in an opinion piece for CNBC. “But those of us involved with Walmart’s journey can attest that the business benefits of reducing emissions are just as evident as the societal ones.”
Climate change remains a divisive issue in corporate America, with CEOs at one end of the spectrum proactively calling for emissions reductions and leaders at the other disputing the very existence of man-made global warming. A global survey of 1,409 CEOs conducted in late 2015 by PwC found opinions were split right down the middle, with half “not very concerned” or “not concerned at all” about climate change and the other half “somewhat concerned” or “extremely concerned”.
The CEOs surveyed were more worried about over-regulation, an increasing tax burden, geopolitical uncertainty, exchange rate volatility and cyber threats. The only issues that concerned them less than climate change were unemployment and access to affordable capital.
Walton sits on the risk committee of the Risky Business Project, established in 2014 to advocate greater use of green energy by corporate America. It is co-chaired by former New York Mayor Michael Bloomberg, former Goldman Sachs CEO, U.S. Treasury Secretary Henry Paulson and hedge fund manager and environmentalist Tom Steyer. Former chairmen or CEOs of Cargill, Caterpillar and Xerox also sit on the risk committee.
Seriously addressing climate change requires cutting greenhouse gas emissions by at least 80% by 2050 in the U.S. and across all major economies, Risky Business said in its annual report released this month. “We find that this goal is technically and economically achievable using commercial or near-commercial technology,” the report said. “Most important, we find that meeting the goal does not require an energy miracle or unprecedented spending.”
By-and-large, burning coal or natural gas is still a cheaper and more reliable way of generating energy than harnessing the power of the sun, wind or ocean. The cost of renewable energy sources, however, is falling as technology improves.
In Walmart’s case, Walton claims initiatives the company introduced around a decade ago have saved it billions of dollars. In 2005, it announced an aspirational goal to be fully supplied by renewable energy sources, which now provide 25% of its energy needs. Current CEO Doug McMillon last month said it plans to reach 50% by 2025.
Walmart has actively reduced its carbon footprint by investing directly in solar power projects. It also has doubled the fuel efficiency of its U.S. truck fleet between 2005 and 2015, a move Walton said avoided carbon emission of nearly 650,000 metric tons, while also saving nearly $1 billion in the past fiscal year alone.
It remains to be seen how much such stories will influence the president-elect, who is on the record claiming that climate change was a hoax created by China to undermine the U.S. economy. Trump’s choice for secretary of state, ExxonMobil CEO Rex Tillerson, accepts that climate change is occurring, though environmentalists fear his career-long oil industry experience would make him reluctant to forcefully support the renewable energy sector.
If any other American companies are to follow in Walmart’s footsteps, at least for the foreseeable future, it’ll likely be their choice and not a regulatory measure pushing them.