Wal-Mart grows 'green' strategies 

Wal-Mart grows 'green' strategies

Wal-Mart grows 'green' strategies

BENTONVILLE, Ark. - Andrew Ruben, vice president of strategic planning for the world's biggest retailer, leans across the table and pleads, passionately, for consumers to embrace the compact fluorescent light bulb. Though a CFL bulb costs more, it uses 75 percent less energy and lasts 10 times longer than a regular bulb.

"Tell everyone to buy this light bulb!" he says, his voice trembling just a bit. "If we could get every American to change "a single light bulb", we'd be doing the world a world of good."

What's sparking Ruben's fervor is a new mission at Wal-Mart: embrace the Earth. advertisement




The $312.4 billion retailing giant has launched an aggressive program to encourage "sustainability" of the world's fisheries, forests and farmlands, to slash energy use and reduce waste, to push its 60,000 suppliers to produce goods that don't harm the environment, and to urge consumers to buy green. This week for the first time, Wal-Mart will report on its carbon dioxide emissions - the "greenhouse" gases that cause global warming.

"We asked ourselves: If we had known 10 years ago what challenges we would face today, what would we have done different?" says CEO Lee Scott. "What struck us was: This world is much more fragile than any of us would have thought years ago."

Already, Wal-Mart has become the world's largest buyer of organic cotton. It introduced "fair trade" coffee at its Sam's Clubs. It began selling some organic foods in the spring and will introduce others this fall. And it is pushing suppliers to use smaller packages to cut waste.

Critics like WakeUpWalmart call the efforts "green-washing." They say the efforts are an attempt to polish a corporate image tarnished by controversies over low pay and limited health care benefits for its employees and "anti-big box" feelings in some towns.


Environmentalists ecstatic
But many environmentalists are ecstatic. Wal-Mart is a very big rock to throw into the pro-environment pond, and its ripples, they say, will be felt across the globe.

"Wal-Mart is a huge player, and they have enormous clout," says Scott Burns of the World Wildlife Fund, which has 10 employees working with Wal-Mart on several projects, including sustainability of fisheries. "They're sending a very powerful signal that already is having effects on the way people produce products for them."

Wal-Mart says it will:


• Slash gasoline use by its trucking fleet, one of the largest in the nation, and use more hybrid trucks to increase efficiency by 25 percent over the next three years and double it within 10 years. That will save $310 million a year by 2015, the company says.


• Buy 100 percent of its wild-caught salmon and frozen fish for the North American market only from fisheries that are certified as "sustainable" by the non-profit Marine Stewardship Council within three to five years. That designation means areas of the ocean aren't fished in ways that decimate fish populations.


• Cut energy use at its more than 7,000 stores worldwide by 30 percent and cut greenhouse-gas emissions at existing stores by 20 percent in seven years. Wal-Mart is the largest electricity user in the United States.


• Reduce solid waste from U.S. stores by 25 percent within three years.

The company, second-largest in revenue in the world behind ExxonMobil, has vowed to invest $500 million a year in energy-saving technologies.

It has built test lab stores in Aurora, Colo., and McKinney, Texas, where it is experimenting with everything from wind power to permeable asphalt that lets rainwater seep through parking lots to help refill groundwater aquifers. It wants to build stores that produce 30 percent fewer greenhouse emissions in the next four years.

And it has reached out to environmental groups, many of which were once highly critical of the company; Wal-Mart has made them part of its in-house planning.

On Climate Change Day in mid-July, it hosted former vice president Al Gore at its corporate headquarters here. "We know that Wal-Mart is not necessarily an easy place to come to," Scott admits. Yet after Gore showed his global-warming film, "An Inconvenient Truth," he got a standing ovation from a crowded Wal-Mart auditorium.

"A lot of organizations in that room had campaigned against Wal-Mart. We were kind of skeptical," says Paul Rice, founding president and CEO of TransFair USA, the nation's only group that certifies products such as coffee as "fair trade," meaning they are bought from groups that pay growers fair wages. "But no one is anymore."

Wal-Mart isn't pushing sustainability solely out of the goodness of its heart. It has realized that it can make money by selling products that are environmentally friendly. It can make millions selling recycled trash or save hundreds of millions by cutting transportation costs.

It even is actively supporting the idea of a system for companies to "trade" carbon dioxide credits. Wal-Mart believes it can earn lots of credits by saving energy, and it can sell them for millions of dollars to companies that can't. All of those savings will go into keeping prices on its products low, it says.

Wal-Mart also says it is worried about having enough products, primarily fish and other foods, to sell to consumers in the future.

"We set out to do (sustainability) as an obligation, a good-works effort," says CEO Scott. "But we discovered the truth: The real reason to do this is for the business itself."

Wal-Mart has formed 14 sustainable value networks made up of employees, suppliers and environmentalists. The groups get together regularly in person or on conference calls to brainstorm how products that don't hurt the environment can be made or bought.

The networks work with Wal-Mart's buyers and suppliers, and the suppliers of its suppliers, to push change all the way down the business chain. "We've never worked this way before," says Matt Kistler, vice president of product and packaging innovation.

They're mapping whole product lines to find out where the environment is hurt along the way and how to stop that.

"When you hear your words coming out of their mouths, it's amazing," says Suzanne Apple of the World Wildlife Fund. "These are issues we've been working on for years."


Fishing for profits
Manish Kumar supplies frozen fish to Wal-Mart.

Like many of the company's 60,000 suppliers across the globe, Wal-Mart is his biggest customer. In the four years since he landed the business, he's become the retailer's largest supplier of frozen fish in the United States. That's tens of millions of pounds of fish a year.

The way he does business today is radically different than just eight months ago, when he and other fish suppliers were called to Bentonville for a meeting on buying fish only from sustainable fisheries.

"We didn't even know what the Marine Stewardship Council was. Now, it's all we do. The speed with which things are happening is incredible," says Kumar, CEO of The Fishin' Co., based in Pittsburgh. Now, he works with 18 fish-processing plants that use only fish accredited by the MSC.

Wal-Mart, the world's largest buyer of fish depending on the species, now sells 10 fish products with the blue MSC label, including wild salmon and pollock.




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