Tuesday, August 22, 2017

LCA and the world’s 28th largest economy

This has to be one of my best summers across the last seven years. I no longer have much control over whether I keep my job. It might sound terrifying to leave your fate in others’ hands but I am more relieved than worried at this point. So faced with a choice of writing blogs vis-a-vis bread and butter academic papers neither of which anyone seems to read, I choose the former as it is more fun and something even my family might enjoy someday. On that note, my tennis has seen a massive improvement this summer, thanks entirely to my father-in-law, a fine tennis player (you guessed right, my wife will be the first person I will be emailing this post). Let me get to the point. This post is about the environmental sustainability of the 28th largest economy in the world. These last two statements are not as disjointed as they might appear because I purchased my tennis balls from the latter. If you thought I am talking about a country, you are wrong. I am talking about Walmart, which is the largest corporation in terms of annual revenues (~$486 Billion in 2016 - the next largest corporation’s revenues were less than half that). Yeah, much to the chagrin of some of my environmentalist friends, I do shop there whenever convenient, which is not all that seldom. Therefore, when I came across this NPR report about sustainability at Walmart, one that fundamentally entails a life cycle assessment (LCA) of an entire corporation, I could not but go bananas. Incidentally, Walmart sells a billion pounds of bananas each year. A government mandate for each and every product retailed at LCA of Walmart would be akin to a full employment act for LCA experts. I digress. Walmart has a voluntary goal of reducing it’s GHG footprint by a billion tons between now and 2030, called Project Gigaton. When in a cynical mood, I would call voluntary a euphemism for cheap and empty but in today’s climate (pun intended), where the world’s richest and most powerful nation has abdicated it’s committment to sustainability, a pragmatist can ill-afford to be dismissive of corporate charity. When optimistic citizens, NGOs and not-entirely-insincere executives are stepping up  to the challenge, academics are obligated to descend from their ivory towers and play a constructive role.

Imagine you are Walmart’s sustainability lead. Ignoring for now the cold-hearted considerations of the dismal science (i.e. Economics), just think about where would you look to reduce your corporations’ overall climate footprint? If the government mandated a cost benefit analysis of what is the right level of sustainability that Walmart should seek that would be akin to a full employment act for both economists and LCA experts. I digress again. If you had asked me to guess which activity of Walmart contributes the most to it’s aggregate climate footprint my top two choices would have been, energy use at their warehouses and emissions from transportation and logistics. I am of course ignoring the emissions associated with the durables such as air conditioners or furnaces for which the bulk of life cycle emissions are during their use phase i.e., they depend on how fickle-minded and lazy consumers operate them, aspects over which Walmart has no control whatsoever. Ofcourse, Walmart could try to increase the sales of greener versions of these durables such as energy star appliances but that is a whole another topic.

So it might come as a bit of surprise that it is neither Walmart’s own energy use nor emissions during transportaiton that were the largest sources of emissions. Instead, it is the production of fertilizers. So how does urea make Walmart stink even though neither it’s production nor sales are central to Walmart’s bottom-line?  Enter LCA. An assessment of the supply chain emissions, effectively a form of LCA, of the various products retailed at Walmart appears to show that it is fertilizer use on farms that produce the grains that go into the meat and dairy products that go into the procesed foods that Walmart sells are the culprit. So Walmart has to convince the processors who in turn buy the grains, dairy and meats to clean up their act. Unlike with life cycle emissions from durable goods, Walmart can exercise substantial influence over the products they put on their shelves or more importantly on their website.  That is tough but not impossible task for Walmart. But I am glad to see that my trade is stepping up to the task and I look forward to teaching it again this Fall!

No comments:

Post a Comment