How Aldi plans to grow its store footprint 30% and still halve emissions

A leap in business volume is a common reason for backtracking on emissions commitments, but food retailer Aldi thinks it can buck the trend.

Over the next three years, the company, based in Germany, plans to spend more than $9 billion to open 800 new stores in the Northeast, Midwest and Southwest of the U.S. Meanwhile, it’s science-based targets remain in place:

• Scope 1 and 2 cuts of 52 percent by 2030 and 90 percent by 2035, from a 2021 baseline. 
• Scope 3 cuts of 25 percent by 2030 and 90 percent by 2050, from a 2022 baseline.

“It’s incredibly ambitious,” said Aaron Daly, a retail expert and vice president of strategic development at Ecology Action, a nonprofit in Santa Cruz, California, that develops community climate solutions. “It’s the kind of ambition that we need and that I wish every retailer was taking on. It’s doable, but just barely.”

Amber Hardy, Aldi’s director of systems and sustainability, unpacked the key initiatives that the company will use to deliver on its goals.

Refrigerator upgrades

Walk into a typical supermarket and there’s a good chance the coolant flowing through the refrigerator units will be a hydrofluorocarbon (HFC), one of a group of gases with global-warming impacts thousands of times greater than carbon dioxide. Those coolers will also leak about 25 percent of their refrigerant in a year, according to the U.S. Environmental Protection Agency.

Figures like that explain why Aldi identified refrigerator upgrades as its top priority for reducing emissions. Natural refrigerant alternatives — gases such as CO₂, ammonia and propane, which have zero or near-zero global warming potential — are available, and the company aims to transition all its U.S. stories by 2035. 

“Currently, more than 740 of our stores already use natural refrigerants, helping us save 60 percent of potential carbon emissions annually,” said Hardy. “Beginning in 2025, all new and remodeled stores will exclusively feature natural refrigerant systems, further advancing this effort.”

“We think about what kind of bag are we going to take home or we think about what kind of products on the shelf are we going to be bringing home,” said Peter Cooke at the Ratio Institute, an Ecology Action project that focused on food retail. What we don’t consider, he added, are leaks of HFCs. “It’s invisible to us.”

More data, new technology, less energy

Aldi uses renewable energy across all of its stores, is transitioning heating systems away from fossil fuels and also running multiple trials of other methods for reducing energy use in its stories. These include:

• Technology that recovers heat from refrigeration units and uses it to reduce the energy required to run HVAC equipment.
• Automated heating, cooling and lighting systems that ensure energy is used only when it’s needed.
• Better use of data, including real-time electricity sub-meters that identify when systems are performing optimally and technology that watches for gradual failures in HVAC and refrigeration systems. “Underperforming equipment often otherwise goes undetected but increases daily utility usage,” said Hardy.

“At 12,000 square feet, our typical store is much smaller than the majority of grocery retailers, which makes it inherently more efficient,” added Hardy. The average U.S. supermarket is almost 50,000 square feet, according to FMI, a food industry organization. 

Partnering on Scope 3

Aldi’s Scope 3 budget includes emissions generated by building new stores, wasted food and the farmers in its network of suppliers.

For the latter, the company has fewer relationship to manage than some supermarkets because it focuses on own-brand products and sells only the most popular products in the most popular sizes. “Given our stores are stocked 90 percent with ALDI-exclusive brands and the majority of our emissions come from our supply chain, working in lockstep with our supplier network is an essential part of our strategy,” said Hardy. 

Within that network, the company has a “heightened focus” on dairy and beef, said Hardy. It’s tackling emissions in those areas by through multistakeholder initiatives, including the Dairy Sustainability Alliance and Supplier Leadership on Climate Transition. Working through the supplier leadership initiative, ALDI will offer training and resources to help its suppliers set science-based targets.

To cut construction emissions, Hardy said the company works closely with architects, planning engineers and construction companies to manage and consider sustainability and follows the principle of “reduce, reuse and recycle” when selecting materials. Last year, the company measured the emissions associated with the production, procurement and lifecycle of construction materials in its stores. Going forward, it will use this baseline measurement of embodied carbon to assess the use of more sustainable materials in new construction projects.  

Comparing Aldi to its competitors

Aldi is notable for maintaining a commitment to significant emissions reductions during a period of rapid growth, but its not the only retailer with ambitious targets. Walmart, Ahold Delhaize and Albertsons all have SBTi-validated 2030 targets for Scope 1 and 2 cuts — for 65, 50 and 47 percent, respectively. 

Such ambition is not uniform in food retail, however. Costco has set a goal of a 39 percent reduction in Scope 1 and 2 by 2030, but has not committed to having its target validated by the SBTi. Kroger’s commitment was withdrawn by the SBTi after the retailer missed a January deadline to submit details of its target for validation. And the latest sustainability report from Publix, which operates close to 1,400 stores in the Southeast, makes no mention of an emissions reductions target.

Tight margins are a common reason why some retailers are not doing more, said Cooke. “They’re sort of risk adverse because the profit margin is so slim that if they make a miscalculation or if they do something wrong, then a 1 percent profit margin all of a sudden becomes a negative profit margin.”

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