Walmart's FY2026 ESG report: climate progress and new sustainability targets

Walmart has fallen short of the 2025 climate target it had approved by the Science Based Targets initiative and has replaced it with a new goal running to 2031, according to the company's FY2026 ESG report published in July.

Absolute emissions from Walmart's own operations, covering scopes one and two, fell 7.5 percent year over year to 14.4 million metric tons of carbon dioxide equivalent, leaving them 24.6 percent below the 2015 baseline. The target the company had signed up to was a 35 percent absolute reduction by the end of the fiscal year. Walmart notes in the report that the result exceeds an earlier, less demanding target aligned to two degrees of warming.

The replacement near-term target, validated by SBTi as consistent with a 1.5 degree pathway, is a 28 percent cut in absolute scope one and two emissions by FY2031 against an FY2025 baseline. The retailer's aspiration to reach zero operational emissions by 2040 is unchanged. On energy, Walmart reported that renewable sources supplied 53.3 percent of its global electricity, ahead of the 50 percent it had targeted for 2025.

Walmart attributed the year's progress mainly to lower refrigerant leakage and the shift to refrigerants with lower global warming potential, which cut related emissions 20.7 percent, alongside clean energy expansion in the US. Working against those gains were store network growth in several markets, higher long-haul fleet mileage and colder seasonal conditions in the US and Canada.

Sustainable cotton sourcing slips at Sam's Club, holds at Walmart US

The report, which covers the fiscal year from February 1, 2025 to January 31, 2026, also sets out the retailer's textile fibre sourcing results for the year in which its 20x25 commodity programme ended.

Supplier-reported cotton volume classified as more sustainable in Walmart private brand apparel and home textiles reached 90.6 percent at Walmart US, up from 89.8 percent a year earlier though still below the 93.5 percent recorded in FY2024. At Sam's Club US the figure fell to 64.0 percent from 80.7 percent, while Walmart Canada rose to 89.8 percent. Walmart counts recycled cotton and cotton certified under Cotton USA, Better Cotton, organic or Fair Trade standards within the definition.

Recycled polyester passes half of US private brand volume

Recycled polyester accounted for 50.4 percent of supplier-reported polyester volume in Walmart US private brand apparel and home textiles, against 28.0 percent the previous year, the largest single-year movement in the report's textile data. Walmart Canada rose to 42.8 percent from 12.6 percent and Sam's Club US to 69.5 percent from 63.3 percent.

Man-made cellulosic fibres sourced from what Walmart terms more sustainable forests, verified through the Canopy 'green shirt' designation, reached 89.7 percent at Walmart US, though Sam's Club US slipped to 75.1 percent from 79.1 percent. The share of apparel and soft home net sales from suppliers with at least one facility completing the Sustainable Apparel Coalition's Higg FEM assessment was unchanged at 97.5 percent.

All the fibre figures are self-reported by suppliers representing roughly 95 percent of in-scope net sales, and are not covered by the limited assurance Walmart obtained for its greenhouse gas data. The retailer states in the report that traceability beyond first-tier suppliers remains limited in complex supply chains including apparel, restricting its ability to verify upstream labour and environmental practices. Walmart said the strategies developed under 20x25, which covered cotton and man-made cellulosics among 20 commodities, have been folded into its merchandising approach, with no replacement dated targets set out.

This article was written with the assistance of AI.