Dive Brief:
- The Walgreens Boots Alliance reported an increase in its scope 3 emissions Friday, with the company generating 64,000 metric tons of carbon dioxide equivalent in 2023, up from 61,000 metric tons in 2022.
- The retail pharmacy brand — which owns Walgreens and Duane Reade in the United States and Boots in the United Kingdom — reported scope 3 emissions for two categories it said it has financial control over: Business travel and a portion of its downstream transportation. The latter accounts for its operations, distribution and delivery by car, aircraft, trains and sea it outsources to third parties.
- Despite a spike in scope 3 emissions, Walgreens reported an overall decline in its carbon footprint with 1.5 million metric tons of carbon dioxide equivalent emitted in 2023, down by 24.5% compared to a 2019 baseline. The company said 12% of its emissions were from product delivery and 1.7% from business travel. The majority of emissions — 86.4% — were from energy consumption, including electricity and natural gas.
Dive Insight:
Though Walgreens’ scope 3 emissions did increase in the 2023 fiscal year, the company said its indirect emissions — that are a consequence of its activities but generated from sources that are not owned or controlled by the company — have declined by 13% compared to a 2019 baseline.
The company also reported it had reduced its scope 1 and scope 2 emissions by 25% compared to a 2019 baseline. Walgreens attributed the emissions reduction to its strategy of prioritizing energy-efficient projects and renewable sources. The progress is in line with Walgreens’ goal of cutting its scope 1 and scope 2 emissions by 30% by 2030, compared to its baseline.
The Deerfield, Illinois-based drugstore brand said it reduced its overall carbon footprint through effective management of equipment and systems across retail locations, distribution centers and fleets. The company also invested in energy-efficient lighting, heating, ventilation and air conditioning units, refrigerators, and photovoltaic systems, in addition to engaging and educating its employees around energy consumption and conservation, according to the report.
The pharmaceutical manufacturer and distributor said it also placed healthcare and wellbeing at the center of its ESG framework. This has resulted in the company donating up to $373 million to address health disparities in underserved communities in the U.S. and committing to increase representation of people with disabilities across its workforce.
“Our health-centered ESG strategy plays an integral role in our ambition,” Walgreens’ ESG Committee Chair Ornella Barra said in a press release accompanying the report. “At the heart of that responsibility is delivering affordable, accessible and quality healthcare and we have always understood the power of partnerships to achieve this.”
Walgreens CEO Tim Wentworth mirrored Barra and said the company’s future strategy is focused on “addressing the most urgent needs for [its] people, patients, and consumers today.” Wentworth said it is especially important at a time where climate change, affordable healthcare and cost of living impact healthcare systems and, by extension, people every day.
The ESG report comes soon after the drugstore chain announced it was laying off about 5% of its corporate workforce — 267 roles — in November. The job reductions were the second in the calendar year: Walgreens eliminated 10% of its workforce — 504 roles — in May.
The layoffs followed a year of poor financial performance from the company. Walgreens missed Wall Street earnings expectations in its third fiscal quarter and cut its 2023 outlook, citing macro factors including a weak respiratory season and falling demand for COVID-19 tests and vaccines. The deduction, along with its Q3 results, caused its stock to plummet at the time.
2023 also saw an overhaul in Walgreens’ C-suite, with the departures of its CEO, CFO, CIO and, most recently, its chief medical officer
