Supermarket giant Woolworths has become Australia’s first corporate retailer to have its emission reduction goals endorsed by an independent, UN-backed body amid rising pressure from investors for companies to take climate action seriously.
The company has pledged to cut the emissions produced by its 3000-strong retail and warehouse network by 63 per cent by 2030, working from 2015 as a baseline. This target will affect scope one and two emissions, which relate to Woolworths’ direct or indirect emissions.
A net-zero emissions target is also pinned for 2050. The company’s 2030 targets have been ratified by the Science Based Targets initiative (SBTI), an independent global body formed by the United Nations, CDP, the World Resources Institute and the World Wild Life Fund for Nature (WWF).
The SBTI assesses and approves companies’ targets through a scientific lens and ensures they align with the Paris Agreement’s goal of limiting climate change to an increase of 1.5 degrees on 2015 levels.
Woolworths and Transurban are the only two companies in the ASX 20 to sign on to the scheme and the supermarket is one of only 25 Australian companies that has done so, according to the SBTI’s website.
The move comes amid growing pressure from shareholders for company boards to take material action on climate change, with corporate heavyweights such as Woodside, QBE, Santos and BHP all fronting climate-related backlash from investors in recent years.
Fiona Walmsley, Woolworths’ head of sustainability governance, agreed climate action was becoming increasingly important for investors, with Woolworths fielding frequent queries from investors over the company’s plans.
“We’re definitely having more conversations with investors on this, but it’s coming up across the board from a lot of our stakeholders, including our team members and customers,” she said.
Woolworths will achieve its 63 per cent reduction goal by active initiatives across its store networks, rather than through carbon offsetting.
These will include a widespread rollout of solar panels and battery installations at stores and distribution centres, a fleet of electric delivery vehicles, sourcing renewable power, and more energy-efficient in-store lighting and refrigeration systems.
The company’s move comes as a slew of other retailers have also begun to take more meaningful climate action. Major retailer Wesfarmers announced on Wednesday Bunnings, Officeworks, Kmart and Target will have net zero scope one and two emissions by 2030.
Earlier this week, supermarket rival Coles announced it would source 90 per cent of its power in Queensland from renewable sources by 2022.
James Cook, chief investment officer at ESG-focused fund U Ethical, welcomed the move by Woolworths and its retail peers despite the slightly “disparate” nature of the companies’ climate goals.
“It’s still early days, but it is steps in the right direction,” he said. “The more disclosure the better, and the more that Wesfarmers and Woolies step forward the more it ups the ante on the rest of the corporate sector that may be lagging.”
Mr Cook had suspected sustainability initiatives may have taken a back seat during the COVID-19 crisis as companies sought to cut costs, however, the pandemic has actually increased focus on sustainability issues, he believes.
“[COVID-19] has heightened the awareness of the issues the world’s facing, whether it be from climate change or modern slavery. Disclosure on this is front and centre, so the more we see that, the more standards will evolve.”
“I think we will see many other great Australian companies follow in raising their own climate ambitions and set science-based targets,” he said.