Mike Duke

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 }

Walmart: Still the green giant

May 19, 2010

051026_MB_GreenWalmart_exWalmart and GE are the superpowers of corporate sustainability. They have enormous impact (WMT) and influence (GE). Recently, I hosted a dinner about sustainability for Motorola where an executive named Bill Olson described how the company developed its Eco-Moto W233 Renew carbon neutral, energy efficient, environmentally friendly phone. To do so, Motorola needed a company that would sell it recycled plastic for the phone. That was GE. It also needed a retailer to enthusiastically sell the phones. That was Walmart. In fact, as Bill recalled, WMT exec told him that giant retailer would before long be selling nothing but “green” phones.

The point is, WMT and GE are changing business, often in unseen ways. So it’s worth keeping up with their efforts to meet their own ambitious sustainability goals. Where are they succeeding? Where are they falling short? How strong is their commitment?

WMT’s 2010 Global Sustainability Report, which was released recently, provides a snapshot of the retailer’s work. The 47-page report (available here) is, if nothing else, a reminder of the scope  and depth of WMT’s efforts—the company is buying renewable power, reducing packaging, reducing waste, making its fleet more efficient, and selling more sustainable products, and not just here in the U.S.

Here are some highlights:

Bentonville Buddies: Mike Duke and Environmental Defense Fund's Fred Krupp

Bentonville Buddies: Mike Duke and Environmental Defense Fund's Fred Krupp

When CEO Mike Duke took over last year from Lee Scott, there were questions about his commitment to the sustainability efforts. He now appears to be a believer. In the introduction to the report, he writes that  WMT has been able to “broaden and accelerate” its commitment to sustainability even during the recession. And he says:

Sustainability continues to make Walmart a better company by reducing waste, lowering costs, driving innovation, increasing productivity and helping us fulfill our mission of saving people money so they can live better.

That’s about as good a summary of the business case for sustainability as you’ll find. [click to continue…]

{ 6 comments }

Two cheers for Wal-Mart’s CO2 pledge

February 25, 2010

WMT-EDFUntil now, Walmart’s bold sustainability efforts were marred by a glaring omission.

The $405-billion a year retailer has worked hard since 2005 to save energy, reduce waste and sell more sustainable products.

But it resisted pressures to reduce or hold steady its own greenhouse gas emissions. In fact, its carbon emissions have grown, as the middle graphic below shows. (There’s a cleaner version in WMT’s responsibility report, here.) When it comes to global warming, Walmart would appear to be doing more harm now than it was three or five years ago.

en_c_impact1

Today, Walmart made its first major commitment to reduce greenhouse gases–although, in typical WMT fashion, rather than set a tough goal that might affect its own growth curve, the company plans to turn up the pressure on its thousands of suppliers to reduce their emissions. [click to continue…]

{ 2 comments }

Wal-Mart CEO has a problem with gays

May 4, 2009

Mike Duke, who has been chief executive of Wal-Mart Stores for just three months, is getting a lot of attention in the blogosphere. It’s not the kind of attention a new CEO wants.

“Shameful, bigoted and discriminatory” is the headline over one blog post about Duke.

Why? Because, it turns out, Duke signed a petition last year that put an initiative known as Act 1 on the ballot in his home state of Arkansas. The controversial initiative says that only married couples may become adoptive or foster parents in the state, closing the door for same-sex couples. It passed in November with 57 percent of the vote.

Mr, Duke, what on earth were you thinking?

Needless to say, this is unwelcome news for Wal-Mart, the world’s biggest retailer, and it’s especially hurtful to the company’s gay employees. Wal-Mart has struggled in recent years to figure out how to deal with LGBT (lesbian, gay, bisexual and transgender) issues. It supported an employee group called Wal-Mart Pride, which triggered a backlash, which subsequently caused the company to pull back its support for national gay-rights group. (See my 2007 FORTUNE.com column headlined Wal-Mart shuns gay groups.) More broadly, Wal-Mart has worked hard and for the most part effectively to position itself as a good corporate citizen as it tries to expand from its rural roots into urban, liberal areas. This will be a setback.

News that Duke had signed the petition caught the company flat-footed. When I asked a Wal-Mart spokesman for a comment, I got this response and no more:

I can confirm that Mr. Duke did sign the petition. Also, Wal-Mart did not take a position on the ballot initiative.

I learned from a source inside Wal-Mart that Duke was going to meet with the Wal-Mart Pride group to talk about the issue. (Note to Wal-Mart employees—feel free to let me know how that meeting went by email at marc.gunther@gmail.com.) A gay employee told me that he hopes that this incident will be a catalyst for positive change.
The story of how Duke’s name came to light—you can see a photocopy of the petition sheet (PDF) here—is the latest illustration of how digital media is exposing corporate and individual behavior.

Last week, a gay rights group i called KnowThyNeighbor.org posted online the names of the 83,000 Arkansas citizens who signed the petition, in a searchable database. The petitions are public records.

KnowThyNeighbor.org had previously published names of more than 500,000 people who signed anti-gay petitions in Massachusetts and Florida. In a press release about the Arkansas outing (my word), Tom Lang, the group’s director, says:

These petition signers need to stand behind their signatures and be responsible for this dehumanizing attack on the gay community. It’s disgraceful that they have chosen to exercise their prejudice at the expense of children who are now being denied access to loving adoptive and foster parents.

Lang urges family members, friends, co-workers and customers of those who signed the petition to confront them:

These conversations can be uncomfortable for both parties but they are desperately needed.  The more that gays and lesbians talk about the importance of their relationships and their love for their children, the faster stereotypes break down and both sides begin to realize how much they have in common.

Two days later, a reader identified as Concerned Arkansas Citizen posted a comment:

One VERY prominent person in Arkansas that has signed the petition is Michael Duke of Rogers, AR. He is the new CEO of Walmart Stores, Inc. He should explain himself.

By Monday, gay and liberal bloggers like Queerty and Daily Kos were running with the story and gettings lots of comments. Who says bloggers never dig up news?

For what it’s worth, Wal-Mart got a 40% rating in 2008 on the Corporate Equality Index published by the Human Rights Campaign, the nation’s biggest LGBT advocacy group. Target, a rival, got a 100% rating and Costco got a 93% rating.

Ellen Kahn, Director of the Human Rights Campaign’s Family Project, sent me this comment by email:

When Mike Duke voted in favor of ACT 1…he essentially closed the door to a hopeful future for the hundreds of children in Arkansas’s foster care system…Duke should think about the real lives of these kids and show some compassion.

Duke’s defenders including Jerry Cox, director of the Arkansas Family Council, who called it an invasion of privacy to publicize the names of citizens who are exercising their right to petition the government, according to the Arkansas Times. What’s more, he wrote, many voters will sign any petition based upon “one simple principle: that the people, whenever possible, have the right to vote on issues that could directly impact their lives.”

I’m not persuaded. Duke chose to sign a petition, which is a public document, so how has his privacy been invaded? What’s more, if you believe, as I do, that equality for LGBT people under the law is a civil rights issue, then there’s no reason to put it up to a popular vote.

At the very least, Duke’s decision to sign the petition reflects poor judgment. As a senior executive of Wal-Mart, he should have known that supporting a controversial measure widely seen as anti-gay could boomerang. (The Arkansas Democrat and Gazette called Act 1 “just another exercise in stirring up bad feelings.”) Duke has alienated LGBT customers and their allies, as well many of his own employees.

And if Duke figured that no one would ever know, well, that wasn’t very smart either. Several years ago, the writers Don Tapscott and David Ticoll wrote a book about transparency in business aptly called The Naked Corporation. There are few secrets these days in corporate America. CEOs (and future CEOs) need to pay close attention to how they behave—on and off the job.

{ 8 comments }