Lee Scott

Why Walmart changed

May 23, 2011

Business is business, they say, but I’m often reminded that business is personal, too.

Back in about 2005, Lee Scott, who was then Ceo of Walmart, traveled with Fred Krupp, the president of the Environmental Defense Fund, to the top of Mount Washington, to visit a weather research station and meet with environmental scientists, including Steve Hamburg, who’s now the chief scientist at EDF. On their way, Scott stopped to visit with a New Hampshire maple farmer who told him that warmer weather was threatening the maple syrup business his family had operated for four generations. By the end of the trip, Scott had seen the impacts of climate change for himself – and seen how they could evolve into business issues for Walmart.

Mike Duke, Scott’s successor as Ceo, took a climate-change field trip of his own a few years later. He spent the night in an ice hotel on a glacier in Sweden, where he heard about the impact of climate change on the arctic. A doubter before then, he was convinced. Meanwhile, another Walmart exec went to Turkey to meet with cotton farmers, visiting a conventional farm — where cotton plants are intensively treated with herbicides and pesticides — and an organic farm where workers and the land were treated better.

Jib Ellison

These trips were arranged by a former river rafting guide named Jib Ellison, whose consulting firm, BluSkye, has guided Walmart on its remarkable journey towards sustainability. A colorful character–he once arranged rafting trips with Americans and Russians to help ease Cold War tensions–Ellison is the hero of a lively new book, Force of Nature: The Unlikely Story of Wal-Mart’s Green Revolution (HarperCollins, $27.99), by Edward Humes, an award-winning journalist. It’s the first book about the greening of WalMart, and a valuable one, particularly for its insights into array of overlapping forces that drove the makeover of Walmart.

About those field trips, for example, Humes writes that the WMT execs

…returned home–as Ellison had planned and hope–moved by what (they) had seen, felt and heard. As never before, Wal-Mart’s leaders had seen the face of climate change, pesticides and air pollution–and it was the weathered face of a maple farmer, it was the vanishing snow lines of ancient glaciers, it was the clothing and skin of children dusky from pesticide residue. “You don’t get that in a briefing paper,” Ellison remarked to Scott. The CEO nodded.

Now, business isn’t just personal, of course. Scott began exploring sustainability back in the mid-2000s because Walmart had s terrible reputation, particularly in places (like Chicago and LA) where it had no stores and wanted to open some. Once Ellison got in the door, thanks to his friendship with Peter Seligmann, the founder of Conservation International, who introduced him to Rob Walton, Walmart’s chairman, he was able to show Scott that the company could save money by going green. [click to continue…]

{ 3 comments }

William Clay Ford Jr.

William Clay Ford Jr.

Before I head to Copenhagen this week for the global climate extravaganza, I want to bring you the latest news about Brainstorm Green, FORTUNE’s conference about business and the environment. I’m delighted by the caliber of leaders and thinkers who have agreed to speak at the event, which will be held April 12-14 in Laguna Beach, CA.

Bill Ford, the executive chairman of Ford Motor, who was a huge hit last year, will be back in 2010. Ford (the company) is one of the few bright spots in the U.S. auto industry, as you know, and while it took a long while coming, the firm seems committed to hybrids, electric cars and other environmentally-friendly technologies, including wheat-straw reinforced plastic and other bio-based materials. Hybrid sales are taking off, as the company recently reported:

  • Ford Motor Company’s year-to-date hybrid sales are 73 percent higher than the same period in 2008, fueled by the introduction of hybrid versions of the 2010 Ford Fusion and Mercury Milan
  • More than 60 percent of the sales of Fusion Hybrid are by non-Ford owners – with more than 52 percent of those customers coming from import brands.
SBjpg-filtered

Stewart Brand

One of the best books that I’ve read in a long time is Whole Earth Discipline: An Eco-Pragmatist Manifesto by Stewart Brand, so I’m thrilled to announce that Stewart will be featured at Brainstorm Green. In the book, he brings a fresh perspective to nuclear power (he’s for it), geo-engineering (he’s intrigued) and megacities (they are both green and engines of economic growth). You can be sure he will challenge conventional wisdom at the conference.

Three powerhouse leaders of the enviromental movement–Frances Beinecke of the Natural Resources Defense Council, Fred Krupp of Environmental Defense and Mark Tercek of the Nature Conservancy–are also planning to attend. Fred and Frances have ben at the event before, and they both plugged into the Washington scene, which will surely be a topic this spring, while Mark, formerly of Goldman Sachs, will be able [click to continue…]

{ 1 comment }

Bill Clinton. Al Gore. Harry Reid. Nancy Pelosi. Steven Chu. Robert Kennedy Jr. Boone Pickens. Carl Pope. John Sweeney. Andy Stern. Van Jones. George Pataki. John Podesta.

They all agreed.

Clean energy will revive our economy, create new jobs, curb climate change and help end our dependence on imported oil. So they said today at a Washington forum organized by the National Clean Energy Project, a project of the influential think tank, the Center for American Progress.

Speakers droned on for nearly three hours. Had they stayed longer, they would have told us that clean energy would cure baldness and whiten teeth, too.

I don’t mean to sound cynical, but it’s hard to see the point of getting all this brainpower together, along with the CEOs of Wal-Mart, Owens Corning and American Electric Power, for a conversation that never got down to the nitty-gritty.

Clean energy is many things, but it’s no panacea. And the real question isn’t whether we want to replace polluting fossil fuels with solar, wind and geothermal energy. The difficult challenges revolve around how we should we do it, how much it will cost, and how to overcome the many obstacles to the so-called clean energy revolution. If it were easy, it would have been done by now.

Those question were all but ignored–surprisingly, since the big names on the program, Clinton and Gore, have been around for a long time. They supported clean energy and opposed global warming in the 1990s but had little to show for it when they left office. “We didn’t have the votes, before,” Clinton said, when asked why. In fairness, Clinton and Gore since then have done great work raising public consciousness around climate.

Maybe their evangelism is—finally—paying off. Certainly the Obama administration’s $787-billion economic stimulus bill allocates lots of money for clean energy, the grid and energy efficiency, Now, despite the dismal economy, momentum seems to be building for the next step—a federal energy bill to promote renewable energy and drive the modernization of the electricity grid.

“We’re going to do an energy bill soon,” Reid said, and it will include a national renewable portfolio standard and policy changes to bring a so-called smart grid a step closer. Only after that, he said, will Congress take up climate legislation.

Clinton and Gore agreed that clean energy had brought together a broader coalition than ever before.

“This [clean energy] coalition has intensified, and held its position in the wake of falling prices for coal and oil,” Clinton said. In the past, he said, “Every time oil dropped, people said give me my Hummer back. That’s not what they’re saying now.”

The country faces three crises, Gore said—the climate crisis, the economic crisis and national security challenges—and “the common thread running through all of them is our ridiculous overdependence on dirty, dangerous carbon-based fuels.”

Only occasionally did the forum get much more detailed than that. No Republicans from Congress were invited to challenge the conventional wisdom, and the business leaders stuck to generalities. Here are a few highlights:

Enhanced federal power will be need to drive the buildout of a national grid. George Pataki, the former New York governor, said: “You try to run a wire through somebody’s community, and that gets as contentious as you can get. Nobody’s going to be for it…What we need is a federal permitting process—not one that’s authoritarian, but one in partnership with the states.”

Reid went a step further. When, during a news conference after the event (see below), he was told that the leader of an association of state regulators had expressed doubt about whether Washington could grab the power to site big tranmission lines, Reid replied bluntly: “He represents state regulators. Whatever we pass at the federal level trumps all that.”

If clean energy means costly energy, poor people will suffer. So said Lee Scott, the outgoing CEO of Wal-Mart: “Remember that if it costs them $5 a week more, they’re not going to buy medication or they’re not going buy something for their children.”

But Scott also urged government leaders to follow Wal-Mart’s lead and set big goals when it comes to sustainability, even if the path forward isn’t unknown. “We had a crystal clear vision of where we wanted to go, but we did not have a crystal clear vision of the route we wanted to get there,” he said.

Turns out that one place the route led was to the chicken fryers. Wal-Mart is about to roll out a few trucks that will run on “the brown grease, the oils that we fry the chicken in, in the deli,” Scott said.

“You’ll be able to eat fried chicken and save the environment,” he added. “We’re going to work on marketing that.”

Energy storage will be needed to drive renewables. Secretary Chu said the technology to build a smart grid is mostly available, but that breakthroughs in storage will be needed before renewable energy can become a bigger part of the electricity mix.

“We have to remember that renewable energy resources like wind and solar are transient. They go up and down,” Chu said. “We don’t have large scale power storage yet. We should start to invest heavily in pump-hydro storage. There’s a possibility of putting in compressed-air storage.”

The winds of change are everywhere. Denise Bode, the new CEO of the American Wind Energy Association, said that 8300 megawatts of new wind power capacity were added last year, that the U.S. now has 70 facilities that manufacture turbines and other products for the wind industry, and that the industry added 35,000 jobs last year. Impressive stuff.

Even more telling is the fact that she joined the wind energy association last fall after a stint as CEO of the American Clean Skies Foundation, a natural gas industry group, and seven years as president of the Independent Petroleum Association of America (IPAA). When oil lobbyists because wind lobbyists, maybe we really are on the verge of change.

{ 1 comment }