Walmart ESG Score and Sustainability

Walmart has made significant strides in reducing its environmental impact and improving its social responsibility. The company has set ambitious goals to achieve 100% renewable energy, reduce greenhouse gas emissions, and increase its use of sustainable products.

In 2020, Walmart achieved 26% renewable energy, a significant increase from 2015 when it was at 15%. This progress is a result of the company's efforts to invest in solar and wind energy.

Walmart's commitment to sustainability extends beyond its own operations to its supply chain and customers. The company has implemented various initiatives to promote sustainable practices among its suppliers and customers, such as offering sustainable products and providing resources for reducing waste and conserving energy.

Walmart's ESG score has improved over the years, reflecting its progress in these areas.

ESG scores are assigned to companies based on their performance in managing Environmental, Social, and Governance (ESG) risks and opportunities.

These scores are calculated by evaluating a company's exposure to significant ESG risks and its ability to manage them.

A company's ESG score can be categorized into three types: a company lagging its industry, a company with a mixed or unexceptional track record, or a company leading its industry.

Here's a breakdown of each type:

Walmart's ESG score can be evaluated based on these categories, providing valuable insights into its performance and management of ESG risks and opportunities.

Walmart's ESG score is calculated using a system called MSCI ESG Ratings, which measures a company's exposure to industry-specific material ESG risks.

The ESG Risk Ratings consider a company's exposure to significant ESG risks, such as those related to the environment, social issues, and governance.

These ratings are based on a company's performance in managing those risks, with a poor rating indicating a higher level of risk exposure.

ESG Ratings videos can be a valuable resource to learn about ESG scores and how they're calculated.

Significant ESG risks, such as climate change and human rights issues, are a key focus of ESG ratings. ESG ratings videos often explain how these risks are assessed.

A poor ESG rating can indicate significant ESG risks, making it harder for companies to attract investors. This is because investors are increasingly looking for companies with strong ESG practices.

ESG ratings videos can help you understand how to use ESG ratings to make informed investment decisions. By watching these videos, you can learn more about the ESG rating process.

In fundamental quant analyses, ESG scores are used in various ways to inform investment decisions. Stock analysis is one area where ESG scores are applied to assess a company's environmental, social, and governance performance.

ESG ratings are used in systematic strategies to identify investment opportunities. MSCI ESG Ratings, for example, are used in many of MSCI's 1,500 equity and fixed indexes.

ESG factors are also integrated into quant models to identify long-term trends and arbitrage opportunities. This helps investors make more informed decisions.

Discounted cash flow models are adjusted to account for ESG factors. This involves considering the potential impact of ESG issues on a company's cash flows.

ESG scores are used to identify leaders and laggards in various industries. This information is useful for constructing investment portfolios.

Here are some examples of how ESG scores are used in fundamental quant analyses:

Stress testing and risk and performance attribution analysis are also important aspects of fundamental quant analyses. ESG scores provide valuable insights into a company's ability to manage risk and achieve long-term performance.

ESG scores are used as a factor in global equity models to inform investment decisions. This helps investors make more informed decisions about their investments.

THESIS performance assessments are created by The Sustainability Consortium (TSC), a global nonprofit organization.

The assessments are comprised of key performance indicators (KPIs) with detailed user guidance and background information. TSC has also created supporting documents like KPI calculation tools, sustainability snapshots, and illustrated supply chain diagrams.

THESIS on SupplyShift is an interactive tool that highlights environmental and social hotspots relevant to a product category, practices that can be used to drive improvement on those hotspots, and KPIs to track and measure year-over-year performance.

THESIS is science-based and stakeholder-informed, including input by companies, academics, civil society organizations, and government agencies.

The process starts by identifying the materially significant environmental and social issues, or "hot spots", across the product life cycle. Improvement opportunities are identified to address those hotspots.

The supply chain hotspots and improvement opportunities are then summarized in THESIS supporting documents.

KPIs are developed in the form of questions used to assess the sustainability performance against the most critical hotspots in each product category.

Here's a breakdown of the ESG Ratings module: