Walmart

FAIRR Commentary

• Nearly 56% of Walmart US-based revenues (including from Sam’s Club) come from grocery sales. Walmart is one of the largest buyers of meat and dairy in most markets they operate, including the US. The company is making investments to shorten its beef and dairy supply chains, which increases the company’s overall exposure to risks and disruptions linked to the animal protein sector.
• The company has a strong sustainable sourcing programme on some animal proteins (such as beef) and they have committed to reducing Scope 3 emissions, including from agriculture, through their Project Gigaton initiative.
• Walmart has been expanding its external offering of plant-based options. However, we found very few options in their private food labels, unlike some of their US peers.
• Overall, as one of the world’s biggest retailers, the company has been conspicuously silent on their role in enabling dietary shifts. They provide no discussion of whether a focus on production efficiency alone is enough to counter the impacts of livestock production.
• The company demonstrates no strategic, company-wide programme to transition its portfolio. It does not have any group-wide metrics that give an indication of its exposure to animal-based foods. Its consumer engagement is limited; however, the company has said that they are merchandising plant-based options alongside traditional meat categories in order to improve sales and consumer choice. Further, and this issue is not integrated into their healthy eating initiatives.
• Internal conversations with Walmart indicate that they recognise this is an issue that requires deeper engagement. They have made a strong start by leading the US retail industry in reducing the impacts of livestock sourcing. We would encourage them to continue to broaden their sustainability focus and build a more strategic plan to transition their product portfolio (through, for example, category-based targets).

Company Comment

Thank you for reaching out about sustainable protein chains and your efforts to help people have access to adequate, sustainable and nutritious food. We enjoyed our discussions with FAIRR over the past year and are glad that you found the letter we shared on the topic a useful reference in your evaluation.

Two areas of the assessment in particular stood out where we may not be receiving credit for work underway. In addition to the previously shared information, we wanted to provide additional clarity and context with regards to:

• Product portfolio: our business seeks to continuously meet customer choice demands. Walmart and Sam’s Club offer an array of plant-based proteins in multiple categories across the store, in the fresh meat, frozen meat, dairy, eggs and chilled breakfast commodities, and health & wellness supplements departments. For example, in fresh meat our merchants are working to sell more plant-based proteins and offer more options to customers in more stores across the country; we are placing the items right alongside the fresh animal-protein. This strategy is also used in the other categories with plant-based and animal protein items to standardize the case and clearly present the various protein options to the customer, whether its beef, poultry, pork or plant-based.

• Scope 3 emissions reduction targets: as we shared previously, Project Gigaton is a platform that enables us to aggregate sustainability commitments from our suppliers in one or more of six key goal areas: energy, agriculture, waste, packaging, deforestation and product use. The agriculture pillar provides guidance to our suppliers to set a target and calculate and report avoided GHG emissions and includes specifics on animal agriculture, noting opportunities in manure management, enteric emissions, dairy yield, pork yield, beef grazing and poultry housing. Our accounting methodology reference document provides additional specifics on calculations. As we shared previously, we annually report our progress on emissions reductions and avoided emissions to CDP and in our ESG Report.

We look forward to continued dialogue and also direct you to our recently published ESG Report for additional information.