HSBC, CDP and Walmart use science-based targets in supply chain

Walmart has created a supply chain finance programme that drives greenhouse gas emissions reductions through CDP’s TCFD-aligned disclosures, and the first time, uses science-based targets (SBTi) to do so in a way that aims for a 1.5C pathway.

Powered by CDP data and supported by HSBC, the industry-first financing programme using SBTi will help Walmart’s private brand suppliers – particularly small and medium-sized businesses – by introducing enhanced standards, tools and capacity building to help them upskill and in turn align their operations with transparent sustainability objectives.

The announcement marks a key next phase in Walmart’s journey to avoid one billion metric tonnes of GHG emissions from its global supply chain by 2030. HSBC has been supporting Walmart’s Sustainable Supply Chain Finance programme (SSCF) since 2019 – encouraging its suppliers through improved financing rates – if they reduce GHG emissions in at least one of the six pillars that are a part of Project Gigaton.

“On average, 80 per cent of a company’s carbon footprint resides in its supply chain, which means delivering on Scope 3 emissions won’t happen unless more is done to help small and medium sized suppliers. This programme does just that and accelerates net-zero transition,” said Surath Sengupta, global head of financial institutions, portfolio management and sustainability, global trade and receivables finance at HSBC.

Since 2017, more than 3,100 suppliers have formally signed on to Project Gigaton with suppliers reporting more than 186 million metric tonnes of CO2e avoided in 2020. However, recent research from HSBC and Boston Consulting Group (BCG) highlighted that small- and medium-sized businesses don’t have the in-house climate expertise and have limited access to capital to drive and fund climate transformation.

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