Fortune

Have I fallen in love with Walmart?

December 4, 2011

In 2006, I wrote a cover story for FORTUNE with the headline: Wal-Mart Saves the Planet. Since then, I’ve written dozens of stories about the retail giant. I’ve reported on Walmart’s impact on the gold mining industry (Green Gold in FORTUNE), its efforts to protect child laborers in Uzbekistan and salmon fisherman in Alaska (Walmart: A bully benefactor on Fortune.com), the launch of a path-breaking sustainability index (Inside Walmart’s sustainability index at GreenBiz), LED lights in Walmart parking lots, the company’s CSR reports, etc. I’ve been critical at times–pointing to Walmart’s BIG problem: climate change and writing that Walmart CEO (Mike Duke) has a problem with gays–but most of my coverage of the company’s sustainability effort has been laundatory.

Now here comes Stacy Mitchell, a smart reporter, with a six-part series in Grist called Walmart’s Greenwash: Why the retail giant is still unsustainable. She assails Walmart for promoting suburban sprawl, making only token efforts to buy renewable energy and selling cheap throwaway stuff. She also faults mainstream environmental groups for focusing “on the small bits of good that Walmart could do—reduce PVC in packaging, for example—while ignoring the much larger consequences of its ever-expanding business model.” She also says that she has been “shocked by just how much of a public relations boost the media have given the company and how little public accountability they have demanded in return.”

These are serious criticisms that deserve a responses. Stacy highlights some important points. Fundamentally, though, we disagree about Walmart, and this post (it’s necessarily longer than most) is an attempt to explain why. Some of our differences are probably a result of what psychologists called confirmation bias, which describes the way all of us seek out, sift through and read evidence in ways that confirm our preconceptions. Confirmation bias is a problem in journalism, politics, economics and even in the so-called hard sciences.

Stacy Mitchell

I’m sure that my experience with Walmart has left me vulnerable to confirmation bias. I’ve visited Bentonville, gotten to know executives at the firm, and the company has participated in Fortune’s Brainstorm Green conference, which I co-chair;  my career and reputation have been helped by my reporting on the company. I suspect the same is true of Stacy, who wrote a book in 2008 called Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses. She has “advised numerous communities on strategies and policies to limit chain store proliferation and strengthen locally owned businesses,” according to her bio.

So read on (skeptically) as I try to sort through some of the issues she’s raised. [click to continue…]

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Waste Management earns its name

December 7, 2010

Big companies aren’t good at breakthrough innovation.  Disruptive innovation usually comes from start-ups or entrepreneurs. (See Big Business’s big innovation problem.)

Big companies are even worse at innovation when it threaten to cannibalize their existing business. Think about why newspapers failed to create a Craigslist or why the music industry missed the chance to invent iTunes. It’s scary to embrace a new venture that just might upend  your old way of doing things.

Yet Waste Management, the nation’s largest trash hauler, is doing exactly that–it’s embracing a new business model that is designed to erode its traditional business of collecting garbage and dumping it in landfills. Instead, the company wants to find the highest, best use for waste in an effort extract the value of what we throw away–value that’s estimated by CEO Dave Steiner to be worth as much $8 to $10 billion a year.

I’ve got a story about Waste Management in the current issue of FORTUNE. (Cover date: Dec. 6) It’s the latest in a series of profiles of FORTUNE 500 companies that I’ve been writing for the magazine. Here’s how it begins:

Reusable grocery bags. Online media. Concentrated laundry detergent in small packages. All are good for the environment because they reduce waste, but they’re a threat to the business of collecting and disposing of garbage.

No wonder executives at Waste Management (WM, Fortune 500), America’s biggest trash hauler, got nervous when Subaru’s TV commercials boasted that its Indiana auto plant sent nothing to the landfill. Or when Wal-Mart (WMT, Fortune 500) embraced the idea of zero waste. In a world where people throw less stuff away, the future of a traditional garbage company looks bleak.

That’s why David Steiner, Waste Management’s chief executive, is turning the company in a new direction. Instead of simply trucking trash to the dump, the Houston-based firm will look for ways to extract value — energy or materials — from the waste stream. When companies like Alcoa (AA, Fortune 500) or Caterpillar (CAT, Fortune 500) want to reduce their waste, the company has a team of consultants that will help — even if that means cannibalizing the core business of burying anything and everything in landfills.

“Picking up and disposing of people’s waste is not going to be the way this company survives long term,” Steiner says. “Our opportunities all arise from the sustainability movement.”

There’s a lot more to the story, including a look at a series of venture investments that Waste Management has made (alongside such VCs as Kleiner Perkins) in companies that are recycling organic waste, or trying to extract energy from waste in new ways. This company is very much worth watching.

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The Bills are coming to Brainstorm

March 4, 2009

No, not the Buffalo Bills. The exciting news is that Bill Clinton and Bill Ford have agreed to speak at FORTUNE’s Brainstorm Green conference, about business and the environment, next month.

Former President Clinton will speak on Wednesday, April 22–Earth Day, Wednesday. Bill Ford, the executive chairman of Ford Motor, will be with us on the opening afternoon of the conference, Monday, April 20. We’ll be at the Ritz Carlton in Laguna Beach, CA. Here’s the current agenda—always subject to change.

I’m feeling good about this year’s programs after months of planning. We’ve got some smart CEOs who are in the thick of the upcoming debate in Washington about climate change, people like Mike Morris of American Electric Power, David Crane of NRG Energy (who was terrific last year), Jim Rogers of Duke Energy and Peter Darbee of PG&E (another returnee, and a very forward-thinking exec). We’ll also welcome Fisk Johnson, the CEO of SCJ Johnson, one of the most progressive CEOs in America when it comes to environmental issues, and the pioneering Jeffrey Hollender, founder and CEO of Seventh Generation (and a board member of Greenpeace). Michael Kowalski, the CEO of Tiffany & C0., will describe the company’s pathbreaking effort to try to make the mining industry more responsible—no easy task. CEOs John Brock of Coca Cola Enterprises and Carl Bass of Autodesk will also speak, along with senior execs from GE, IBM, Wal-Mart, Bank of America, JP Morgan Chase, P&G, and Coca-Cola. We’ll have CEOs oif solar, wind and biofuels companies, too.

On our opening night, I’ll lead a conversation with Paul Hawken, one of my favorite writers on business and the environment. He’s always provocative, and his talk is being called, “Green is the New Business as Usual—and that’s a problem.” From the NGO world, we’ll have Fred Krupp and Gwen Ruta of Environmental Defense, Mark Tercek of The Nature Conservancy, David Hawkins of NRDC, Van Jones of Green for All and many more.

If past Brainstorm events are any indication, though, Clinton will steal the show. He came to a couple of the original Brainstorm events in Aspen after leaving the White House, and he was mesmerizing. Should be fun.

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The recession hits home

December 16, 2008

Oops! I got scooped on the news of my own layoff. Willie Brent had it first on his blog, and then my friend Joel Makower reported the story, as part of a blogpost headlined, “Are environmental journalists an endangered species?” He reports:

Just after Thanksgiving, Fortune magazine gave layoff notices to Marc Gunther, one of the leading business writers on corporate environmental practices (whose blogs also appear on GreenBiz.com), along with Todd Woody, whose coverage of clean technology has led the pack. (Gunther has been asked to stick around as a “contributing writer” and again chair next year’s Brainstorm: Green event.)

Joel got it right, as usual. I got the word on Dec. 4, as Time Inc. and FORTUNE announced their latest round of layoffs, reported to involved 600 positions in all. Why? The economic slump, of course, and an even more drastic downturn in print journalism, which is creating tremendous pressures on editors everywhere. They didn’t get into this business to fire people.

No layoff is fun, and the timing of this one stung. I think the environment will likely become a huge business story, especially post-recession. The Obama administration is ready to regulate, and greenhouse gas controls or taxes, once in place, will have more impact on corporate America than anything —anything— that has come out of Washington in years. Influential companies like Wal-Mart and GE are driving sustainability initiatives throughout the global economy. Young people are passionate about green, and they will bring pressures to bear, as consumers and employees. The China and India environmental stories are only getting bigger. I would have loved to cover all that for FORTUNE.

Still, FORTUNE handled my situation gracefully and so I hope to stay involved in some way with the magazine. I’m biased but I think FORTUNE is easily the best business mag around. I’ve loved working there for the past 12 years, and I will miss working day-to-day with a great group of colleagues. If we can work out the details, I hope to again chair Brainstorm: Green, FORTUNE’s conference about business and the environment and I may well contribute freelance stories to FORTUNE or fortune.com as well. I’ve got one terrific story in the works now.

What, then, lies ahead? The honest answer is that I don’t know, though a number of intriguing possibilities are emerging, even as I have just begun to look around. I want two things, above all. The first is to work with people I like and whose values I share. The second is to make a difference in the world. Of course, I’d like to work on sustainability (broadly defined) and business; that’s where my expertise and my network can best be put to use. Ideally, I’d love to be able to spend some time in the developing world. (Wouldn’t it be great if we could find a way to “green” China, India and Africa, while helping to alleviate global poverty?) Beyond that, I’m going to keep an open mind, considering part-time or full-time work in the world of business or NGOs: writing, speaking, consulting. Blogreaders, you can find me at marc.gunther@gmail.com!

(By the way, I realized the other day that I am far more fortunate that most people who are losing their jobs when I came across this eye-popping statistic in Tim Harford’s Slate column: “The median job-loser in the United States has $200 [in savings] when he loses his job…” One more reason why we need to restore the value of thrift in America.)

By coincidence, yesterday morning I read the “On Work” column in the Financial Times by Lucy Kellaway, whose writing I always enjoy. The headline: “Money, not meaning, is the new secret of happy work.”

Kellaway writes:

Over the past decade, the rich, professional classes have developed an increasingly unhealthy attitude to their jobs…We demanded that work be interesting in itself and, even more preposterously, that it should have meaning.

The result of all these demands was, of course, dissatisfaction. We had climbed to the very top of Maslow’s hierarchy of needs and discovered that, at the top of the pyramid, the air was very thin indeed….

In the past few months, anguish of this sort has vanished. When one’s job is at risk and one’s savings are a shadow of their former selves, the search for meaning at work is meaningless.

What a dispiriting thought.

Even as a newly drafted member of what Marx once called “the reserve army of the unemployed,” I could not disagree more. Yes, we need to work to feed and house ourselves and our families. But we spend far too many hours a day on the job to settle for work that delivers money without meaning. Indeed, it’s the very fact that so many of us want to bring our entire selves to work that will drive business to be more socially and environmentally responsibility. Purpose and profits—we can have it all.

Unexpectedly, I’m energized by the chance to start a new chapter in my life, and especially by the possibility that I may be able to magnify my impact. Maybe it’s time for this reporter-spectator to climb out of the bleachers and get onto the field. We’ll see. I’ll keep you posted here.

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Paulson, China and climate

September 21, 2008

Since returning from the Beijing Olympics last month, Hank Paulson has been a nonstop crisis manager. (I don’t think he’s had a day off.) But when we spoke back in August, and again a couple of weeks ago, we spent some time talking about a couple of his long-term passions: China and climate change.

Paulson’s take on China and climate are the topic of today’s Sustainability column. These issues will matter when Wall Street settles down—as it will one day, although probably not anytime soon. Here’s how the column begins:

Treasury Secretary Hank Paulson has careened from crisis to crisis lately, backing the Bear Stearns rescue, engineering the government takeover of Fannie Mae, refusing to commit taxpayer money to save Lehman Brothers, and Friday announcing a massive program to help banks offload mortgage-related assets.

When he hasn’t been fighting fires, Paulson, the former chief executive of Goldman Sachs (GS, Fortune 500), and his team at Treasury have been working on two big, long-term issues that matter to him, and should matter to all Americans – U.S. relations with China and climate change.

They are intertwined, of course. Without the support of huge, rapidly-developing nations like China (and India), there’s no way that Europe, Japan and the U.S. can drive a global consensus to curb global warming.

You can read the rest here.

It will be a fascinating week in Washington, by the way. President Bush, Paulson, Ben Bernanke desperately want to get their big Wall Street rescue package approved but because the Democrats who control Congress know that, they will try to load up the legislation with their own proposals, some related, some not—including relief for individual homeowners (probably not a good idea), curbs on executive pay (a good idea, but can it be imposed effectively from Washington?), maybe the production tax credit for renewable energy (crazy that this didn’t pass long ago) and who knows what else. The Republicans in the House, many of whom are already disgruntled with Paulson and Bush and their activism, will be very unhappy but likely irrelevant. As I said, it will be a fascinating – and historic – week.

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