Organization: Wal-Mart Stores Inc.

Year: 2015

Description:

RESOLVED that shareholders of Wal-Mart Stores, Inc. (“Walmart”) urge the Board of Directors to set quantitative goals, based on current technologies, for reducing total greenhouse gas (“GHG”) emissions produced by the international marine shipping of products sold in Walmart’s stores and clubs, and report to shareholders by December 31, 2015, at reasonable cost and omitting proprietary information, regarding the goals and the steps Walmart plans to take to achieve them.

SUPPORTING STATEMENT

Scientific consensus exists that the climate is warming and that human activity, primarily the emission of GHGs, is causing it. Marine shipping is one such activity, and its emissions include climate-warming CO2 and black carbon, and disease-causing sulfur oxides. Total fossil fuel-related CO2 emissions attributable to transportation rose by 45% between 1990 and 2007. (http://www.internationaltransportforum.org/Pub/pdf/10GHGTrends.pdf) The International Maritime Organization estimates that marine shipping accounts for 2.2% of global CO2 emissions, and under the “business as usual” scenarios “those emissions are likely to grow by between 50% and 250% in the period to 2050.” (http://www.imo.org/MediaCentre/PressBriefings/Pages/34-mepc-67-emissions.aspx)

Fortunately, as a report by the Pew Charitable Trusts states, “A range of near-, medium- and long-term mitigation options are available to slow the growth of energy consumption and GHG emissions from aviation and marine shipping.” (http://www.c2es.org/docUploads/aviation-and-marine-report-2009.pdf)) The Pew report estimates that GHG emissions from marine vessels can be reduced more than 60%. (Id. at 3) However, reduction of emissions from international transportation may be hard to achieve through regulation because it is difficult to attribute emissions to particular countries.

Walmart has set an overall GHG emissions reduction goal for its supply chain, but it has not set a goal for reducing marine shipping emissions. Walmart is the largest importer of ocean containers, with 731,500 TEUs in 2013, and that number has more than doubled over the past 11 years. Given that a material portion of Walmart’s cost of goods is spent on imports transported via ship, fuel price increases or regulations on ocean emissions could impact financial performance.

Walmart does not disclose GHG emissions from its international marine shipping activities; it does estimate emissions from all “upstream transportation and distribution”— which includes marine shipping, trucking, air freight and rail freight—in its 2014 Carbon Disclosure Project report. It produces this estimate for emissions from all upstream transportation and distribution primarily using data collected from its third-party logistics coordinators and EPA emission factors; only 7% of emissions are from “primary data.” We believe methodologies used by some other retailers are more robust—for example, Marks and Spencer uses 50% primary data for its upstream transportation and distribution emissionsestimate. Kering (formerly PPR), discloses marine shipping emissions using a methodology verified by independent auditors.

Walmart can improve the quality of its environmental impact analysis and better manage risks associated with climate change by setting a specific goal for reducing emissions associated with shipping its products internationally.

We urge shareholders to vote for this proposal.