Walmart Extends Into the EV Sector, Still Isn't a Sustainable Investment
Walmart is investing in partnerships with sustainable companies, including EV brands. Is that enough to make it sustainable? Not exactly.
Walmart Inc. (WMT) isn’t known for its sustainability. Instead, it’s known for its mega-rich founding family, the Waltons, and affordable products tailored to the working class. However, recent partnerships prove Walmart wants to become more sustainable.
Are investments in EVs and other sustainable transportation businesses enough to make Walmart an EV bet? Not quite, and here’s why.
Walmart partners with EV and renewable energy transportation brands.
On Wednesday, June 8, Walmart announced new partnerships with sustainable transportation companies, including those in the EV space. Walmart is prioritizing electric, hydrogen, and natural gas-powered vehicles in its latest round of partnerships.
The partnerships include Cummins Inc., which produces parts and components for EVs and other sustainable forms of transportation. Then there’s Daimler Trucks Freightliner, known for electrified tractor-trailers. Freightliner's eCascadia truck will take part in Walmart’s EV pilot program this summer along with Nikola Corp.’s Tre BEV.
Walmart will also partner with Capacity, a Texas company working on hydrogen-fuel-cell pyard trucks. Meanwhile, Walmart Canada is looking forward to using Tesla’s electric Semi trucks, which are still awaiting the manufacturing process.
Digging deeper into Walmart’s climate pledge
Walmart aims to achieve net zero emissions across all operations by 2040. This means cutting down carbon emissions for its massive fleet of transportation vehicles (10,000 tractors and 80,000 trailers), which shows where the latest sustainable transportation partnerships stem from.
The retail corporation also aims to decrease certain emissions by 35 percent by 2025 and reduce or avoid 1 billion metric tons of certain types of CO2e emissions by 2030. Walmart wants to power half of its global operations with renewable energy by 2025, pushing the number to 100 percent by 2030.
Walmart isn’t a sustainable investment for purists — here's why.
Walmart is still in the early stage of its climate goals. “We're still in the testing stage and trying these technologies,” says Fernando Cortes, senior vice president of Walmart U.S. Cortes also said, “We know that for us to decarbonize our fleet, there's no one solution that can get us really to scale and that's ready to give us that future that we want."
Despite partnerships with companies working on EV and other renewable transportation technology, Walmart isn't sustainable by nature. Future goals are great, but it isn't right now, and corporations can always push those goals back.
Many of Walmart’s emission reduction goals focus on scope one and two greenhouse gas emissions. According to the Environmental Protection Agency (EPA), scope one emissions are “direct [GHG] emissions that occur from sources that are controlled or owned by an organization.” The EPA adds that scope two emissions are “indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.”
Meanwhile, scope three emissions are those the corporation indirectly supports in its value chain. Walmart focuses primarily on the direct and correlated emissions and only has limited goals to reduce scope three emissions.
WMT stock may offer enough sustainability for some investors, but purists won’t want to look here for an impact investing play.