Walmart’s food czar

Jack SinclairNational Geographic is running a months-long project about the future of food in the magazine, online and at live events, including one last Friday here in your nation’s capital. It’s an impressive journalistic undertaking, one very much worth following. I learned last week that a couple of top editors at Nat Geo are farm boys with ag degrees. Who knew? In any event, last week’s confab featured a series of lively and civil conversations about the global food system, and how to fix it.

One of a handful of speakers from business was Jack Sinclair, who oversees the grocery business for Walmart. Walmart, of course, sells more food than any other company in America, and the Bentonville giant is willing to throw its weight around, for better or worse.

Mostly for the better, in my view. Just in 2014, Walmart has supported (with its dollars) better working conditions for Florida farmworkers and a major rollout of organic foods under the hitherto defunct Wild Oats brand. Meantime, it is pushing its big suppliers to dig into their supply chains to make farming practices more efficient.

I sat down with Jack Sinclair before the conference last week, and wrote about him in a story posted today at The Guardian. Here’s how it begins:

One of the most powerful people in the US food industry is a 52-year-old native of Scotland who got his start in the business stacking groceries on supermarket shelves. Today, as an executive vice-president in charge of all the grocery operations at Walmart, Jack Sinclair is still stacking shelves – albeit on a grander scale.

Sinclair, who has been with Walmart since 2007, doesn’t just help to decide which products will make their way onto the shelves of America’s biggest retailer: he also exercises influence over how and where they are grown. In fact, joining Sinclair at a panel discussion at the National Geographic Society last week, former US agriculture secretary Dan Glickman said: “If you ask me what is the most important force in the agriculture today, I’d point to Walmart.”

It’s a startling claim, but there’s little doubt that Walmart’s impact on food and agriculture is vast. More than half of its annual revenues, which topped $476bn last year, come from groceries, and its market share is growing. Increasingly, the retailers has shown a willingness to use its buying power to influence the way that food is grown.

Last week, for example, Walmart invited the CEOs of Campbell Soup, General Mills, Kellogg and PepsiCo, among others, to its Bentonville headquarters for a sustainability summit. Several of these top food execs promised to persuade farmers in their supply chains to use less fertilizer and water to grow crops, and to reduce their greenhouse gas emissions.

I liked Jack Sinclair, although after seven years at the company he has been thoroughly indoctrinated into the “everyday low prices” mantra of Walmart. He must have told me a half dozen times that Walmart’s food initiatives will lower costs and drive out inefficiencies, and will therefore make the food system more sustainable. That’s almost surely true — using less fertilizer on farms saves money and protects waterways from being polluted by runoff — but it will take more than a narrow focus on efficiency to produce affordable, healthy, sustainable food.

For example, those of us in the rich world will need to shift our diets away from meat and especially beef with its heavy carbon and water footprint. A healthy food system means people will drink less soda and eat fewer foods that are heavily processed and high in sugar, salt and fat. Those changes are part of a “sustainable food” movement. Will Walmart be supportive? That’s an open question.

You can read the rest of my store here.

Sustainable business: What’s ahead in 2014?

equipmentprotection3So the answer to the question above is, honestly, it’s anybody’s guess.

As a reporter, I’ve always resisted the idea of what editors like to call “forward looking” stories. Predictions are fun, but it’s hard enough to fully understand the present and the past. My preference is to leave the future to fortune cookies.

So when an editor at Guardian Sustainable Business asked me to write about the year ahead in sustainable business, I’d ignored her and took a look back instead. Here’s how my story begins:

It’s tough to make predictions, especially about the future, the baseball player Yogi Berra reportedly said. (Or was it the physicist Neils Bohr? Or Hollywood mogul Samuel Goldwyn?)

Whoever said it, I agree – so instead of trying to forecast 2014, let’s look back at the the big stories in sustainable business from 2013, knowing that they will shape whatever lies ahead. As the US editor-at-large ofGuardian Sustainable Business, I’ll offer what is unavoidably a US-centric perspective.

My story goes on to look at five themes of the year just past:

  1. The decline in greenhouse gas emissions in the US
  2. Solar power, mainstream at last
  3. The aftermath of Rana Plaza
  4. Industrial-strength sustainability, by which I mean collaborative efforts to change entire industries or systems.
  5. Inequality, on  the political agenda

You can read the rest of the story here.

I see reason to be optimistic about all of these themes. Each offers opportunities for forward-thinking companies. That said, the challenge for business in 2014 will be to accelerate and scale its efforts to deal with the world’s big environmental and social problems. That’s one prediction I will comfortably make.

Amazon’s a great company. But good? Nope.

amazon-logoLike millions of people, I like to shop at Amazon. But the more I learn about the company, the less I like it.

Amazon’s  performance on environmental and social issues has been truly dismal, as a I wrote in a story posted today on Guardian Sustainable Business. Here’s how the story begins:

Jeff Immelt, the chief executive of General Electric and one of American’s most influential business leaders, likes to say that “if you want to be a great company today, you also have to be a good company.”

Another celebrated chief executive named Jeff — Jeff Bezos, Amazon’s founder and CEO– is putting that proposition to the test.

Amazon is, in many ways, a great company. But good? Nope.

Amazon doesn’t publish a sustainability report, probably because it would have little to say. It doesn’t respond to the Carbon Disclosure Project. (More than 80% of big companies do.) It’s ranked very low by Climate Counts, which rates companies on their efforts to mitigate climate change. Amazon’s  data centers get low marks from Greenpeace.

Nor does Amazon do well on social and political issues. Until Bezos agreed to install electricity last year, warehouse workers literally toiled in sweatshops where the temperatures could top 90 degrees. The company has fiercely fought efforts by states to collect sales taxes, using bullying tactics at times. If you believe the Seattle Times, and I do, the company gives less to charities than other Seattle companies and “cuts an astoundingly low profile in the civic life of its hometown.” For more, read the rest of the Guardian story. [click to continue…]

We need to fix the food system. But how?

“Today’s food system is unfair, ineffective and operates beyond ecological limits,” Mark Lee says, via email.

“Unfair in that some 925 million are malnourished…

“Ineffective in that there are enough calories out there to feed everyone, but we fail to do so (and if we fail to do so for 7 billion, how will we cope with 9-10 by mid-century?)…

“Beyond ecological limits in too many ways too count – freshwater use, soil degradation, climate impacts, you name it.”

Mark is not an environmental activist. He’s the executive director of SustainAbility, a think tank and strategy consultancy that has worked with such food industry clients as Chiquita, Coca-Cola Kellogg’s, Mars and McDonald’s, Nestle, Starbucks and Unilever. He approached me because Sustainability recently released a report called Appetite for Change, about the food industry and how to fix it.

I’ve been writing a lot about food lately because it interests me, because food and agriculture matter a great deal if you care about climate or global poverty or health, and because there’s so much debate about what the path forward should be. Organics? Farmers markets? Genetically engineered crops? Vegetarianism? Local? [click to continue…]

Smithfield Foods: Sustainable pork?

Unless you avoid pork for religious reasons, you’ve probably eaten pork products from Smithfield Foods: the bacon or sausage in a McDonald’s Egg McMuffin, Armour-Eckrich bologna or ham, pork from Bob Evans or Jimmy Dean’s, an Esskay hot dog at Baltimore’s Camden Yards, and quite likely your Easter ham.

Smithfield is a pork giant. It has 49 factories, 500 or so hog farms, 48,000 employees and about $11 billion in revenues in FY2010. It slaughtered about 27 million animals last year in the U.S. “We’re the largest pork producer in the world, by a long shot,” says Dennis Treacy, the company’s chief sustainability officer.

Yes, Smithfield has a chief sustainability officer–and that may surprise you if you remember reading horror stories about Smithfield’s confined animal feeding operations (CAFO’s), its problems managing pig manure, its labor conflicts or animal welfare  issues in places like The New York Times and Rolling Stone. The company was featured–not in a flattering way–in the movie Food Inc. and sued by Robert F. Kennedy Jr. and the Waterkeeper Alliance.

Dennis Treacy

Treacy had problems with Smithfield, too, before joining the company. In fact, Treacy, who was the director of the Department of Environmental Quality (DEQ) for the state of Virginia from 1998 to 2002 under Republican Gov. Jim Gilmore, once sued Smithfield for polluting the state’s waters.  (You could look it up.) In 1997, Smithfield was fined $12 million, one of the largest fines at the time, for violations of the federal Clean Water Act.

Now, though, Treacy says Smithfield has cleaned up not just the water but its own act. He’s been with the company for nine years, and says he was hired to make the company more sustainable and improve its reputation. “We have slowly but surely built a sustainability program,” he says. “It’s the right thing to do, and everybody wants to work for a company that is respected.”

I met Dennis earlier this week in Washington. He seems like a good guy, and he’s spent his career on environmental issues–he studied fisheries and wildlife at Virginia Tech, got a law degree from Lewis and Clark in Oregon, which is a top environmental law school, and he lives on a small farm near Richmond where he and his wife raise chickens and rabbits. [click to continue…]

Walmart: The power–and limits–of efficiency

Arguably, Walmart has done more than any environmental group, politician, government regulator or Silicon Valley clean tech firm to nudge the U.S. economy towards sustainability in the last five years.  Walmart’s 2011 Global Responsibility Report, published last week, makes clear that despite the recession and some revently rough going for the company–lately its stock has lagged the S&P500Walmart is pushing ahead towards its big goals: To generate no waste, to be 100%-powered by renewable energy, and to sell lots more products that sustain people and the environment.

Yet a closer look at the report demonstrates that there are limits to what any company, even one as vast as Walmart, can do. Most of its environmental gains have come from doing what Walmart has always done very well–driving efficiency in its stores and supply chain. When sustainable initiatives cost more money, as they sometimes do, progress has been halting.

Still, Walmart deserves at least two cheers, maybe two-and-half for its efforts, particularly in the current, dispiriting political climate.

As Elizabeth Sturcken of the Environmental Defense Fund, which works closely with Walmar, told me:

Leadership on environmental issues is coming from Bentonville these days, not from Washington. Some people in Washington want to roll back basic environmental protection on clean air and clean water, saying it’s bad for business. Our work with Walmart proves that’s not true….Generally,  all the signs that I see are full speed ahead.

Andrea Thomas, who has led Walmart’s sustainability work for the past six months, made a similar point. The company set big, bold, broad goals back in 2005, without knowing how it would meet them. Since then, it has discovered unexpected business benefits.

Rather than being paralyzed by (the goals), they ignited  a lot of energy behind doing experiments, trying different things. Today, there’s a lot of interesting work going on, not just in the U.S., but all over the world. I’m very encouraged by the progress we’re making.

Here’s one success story from the report, a promising new initiative and an arena in which Walmart’s progress appears to have stalled:

Walmart recycling with "super sandwich bale"

Waste: WMT has turned its garbage into an asset, just by thinking about the stuff it throws away in a more disciplined fashion. Across California, more than 80% of waste has been diverted from landfills and made into something else, turning what was a cost center into a source of new revenue.

Said Thomas: “We would pay for people to haul our trash away. And we paid to put it in a landfill. Now people are paying us.”

Success hasn’t come as easily as it sounds, of course. To help find an outlet for food waste, Walmart’s foundation donated 100 refrigerated trucks to food banks. “ Now they have a means to pick up and deliver some of the food that we can’t use in the stores, but that’s still good food,” Thomas said.

Supporting small, local farms: Last fall, WMT announced an array of targets related to agriculture. In the U.S., the company promised to double sales of locally-sourced produce, so that it accounts for 9 percent of all produce sold by the end of 2015. Globally, WMT said it will sell $1 billion in food sourced from 1 million small- and medium-sized farmers in emerging markets by the end of 2015.

To achieve those goals, Thomas told me, WMT has to simplify its supply chain to deal directly with farmers and eliminate some middlemen. “The logistics aren’t as difficult as you might think,” she said. “The farmer can actually drop off produce at the distribution center or at the store.”

If all goes according to plan, WMT  should be able to sell fresher, local food at lower prices, and eliminate some of the greenhouse gases generated by a global supply chain for food. Like the waste initiative, the agriculture initiatives mostly dovetail nicely with the culture of efficiency at Walmart.

Clean energy: To achieve its goal of being powered by 100% renewable energy, WMT has made its fleet, stores and distribution centers more efficient. But its commitment to wind and solar power  has been limited because they cost more than electricity from fossil fuels. The report says:

During FY11, we successfully completed several renewable energy projects, including the installation of 35 solar projects in Arizona, California and Puerto Rico. Eight of the solar projects installed in FY11 utilized thin-film solar, which created manufacturing jobs and accelerated this new technology’s entry to market. We installed seven fuel cell projects in California this year and completed two microturbine wind projects on the parking lot light poles at the Walmart in Worcester, Mass., and at the Sam’s Club in Palmdale, Calif.

This is all to the good. By buying renewable energy in selected markets, WMT will help bring costs down. But because wind and solar power generally cost more than electricity from coal, nuclear or natural gas in most places, WMT can’t or won’t buy clean energy on a  scale that matters. (If the company says in its report how much of its energy now comes from renewable sources, I couldn’t find it. I’d guess it’s well under 10% of  WMT’s total energy spend, but I’m ready to be corrected.) Buying renewable energy would drive up its costs, with no tangible benefits to customers, and put the company at a competitive disadvantage, as the company says in the report:

In our efforts to ensure our operations are contributing to everyday low prices for our customers, it has sometimes been difficult to find and develop low-carbon technologies that meet our ROI requirements.

This, then, is where we run up against the limits of efficiency and, more broadly, what any company can reasonably be expected to do to become more sustainable.

More broadly, it’s a reminder that the rhetoric of green business — how green is gold, how green is green, how clean energy will generate jobs and growth — hasn’t always served the cause well. Sometimes, indeed often, “green” is more expensive than “brown,” or to be more precise, the full costs of “brown” (air and water pollution, GHG emissions) aren’t captured in its price. This is why policy matters. This is why we need to price carbon emissions into the energy economy.

Put another way, so long as environmental leadership is coming from Bentonville and not Washington, we’re in trouble.

 

 

 

 

 

 

GE’s Immelt: I thought wind was a “hula hoop”

ge-logoGE’s chief executive, Jeff Immelt, opened the Net Impact 2009 conference this morning at Cornell University and, as usual, he was thoughtful and provocative. He was bullish on GE, of course, but, after this tough year for the U.S. economy, he sounded more pessimistic than usual  about where the country and its economy are going.

The American consumer, the financial services industry and the construction industry were the major drivers of America’s long boom, going back to the 1980s. None is likely to drive  economic growth in the future, Immelt said.

Instead, he noted, growth will be most robust in the developing world–places like China, India and Brazil that have bounced back more quicly than the U.S. from the global downturn–and it’s by no means clear that U.S. industry is positioned to capitalize on that growth.

Immelt said:

There’s more growth outside the United States than there is inside the United States. We have to recognize that our destiny is connected to the emerging world. We have to repurpose ourselves as an exporter.

The trouble is, the U.S. isn’t educating as many engineers as it should be, he said. Nor are the U.S. government and U.S. companies investing as much as China, say, in energy researchjeffrey_immelt_preview and development. Public policy. also remains a big question mark when it comes to energy because, so far at least, Congress has been unable to pass regulation of global warming pollutants. Other countries are moving faster.

“There’s going to be 10 million jobs created in clean energy,” Immelt said. The question is, will those jobs be in the U.S., in China, or elsewhere?

In the audience for Immelt were more than 2,000 members of Net Impact, a great organization whose purpose is “to inspire, educate, and equip individuals to use the power of business to create a more socially and environmentally sustainable world.” (Disclosure: I’m a new member of the Net Impact board.) Immelt has made GE’s “ecomagination” campaign a hallmark of his tenure as CEO and he said his focus at the company has been to marry capitalism and sustainability. [click to continue…]

FedEx: Pushing the envelope on sustainability

When you need to ship a package, how do you choose between FedEx and UPS? Their services are similar, if not identical. While I’ve never compared prices, I assume they are roughly equivalent.

Could the company’s sustainability practices come into play? I’m told that they do, for select customers. Their employees care as well–people want to work for companies that are helping to solve the world’s big problems, like climate change. Regulators could also be paying attention. Whatever the explanation, FedEx and UPS are competing to become known as the most sustainable shipping company–which means we’re all winners.

FedEx's efficient Boeing 777 freighter

FedEx's efficient Boeing 777 freighter

Mitch Jackson, who is staff director of  environmental affairs and sustainability at FedEx, met with me recently to make the case on behalf of FedEx. He says the company has identified four “building blocks” of its approach to the environment. [click to continue…]

Exclusive: Wal-Mart’s sustainability index

Wal-Mart will make a big announcement this week: The company, working with consumer-goods manufacturers and a group of universities, will unveil plans to measure the sustainability of every product it sells. In time, sustainability labels could provide us with information about the environmental and social attributes of consumer goods, much as nutrition labels tell us about the content of the foods we eat.

Nutrition Facts Label

I’ve been hearing about Wal-Mart’s sustainability index for about a year, but the company has been reluctant to discuss it. (Uncharacteristically so, in my experience.) Wal-Mart’s new CEO, Mike Duke, will announce the index on Thursday, July 16, at the company’s corporate headquarters in Bentonville, Arkansas, before invited suppliers, environmentalists and academics. I’ve been able to piece together the story by talking to Wal-Mart insiders, academics who are working with the company and environmentalists. The Big Money, Slate’s business site, has just published the story  here.

Here’s how the story begins:

PepsiCo buys lots of renewable energy, while a Coca Cola plant recycles plastic bottles. Should environmentalists drink Pepsi or Coke?

Dell is “carbon neutral.” Hewlett Packard says it designs for the environment. Whose laptops are more “green”?

So many choices, so little reliable guidance: Clorox GreenWorks or Seventh Generation? Local or organic strawberries? Paper or plastic? Who’s to say?

Wal-Mart, that’s who. [click to continue…]

Greenpeace ridicules “Traitor Joe’s”

Whatever you think of the people at Greenpeace, you’ve got to admit they are environmentalists with a sense of humor. Recently, Greenpeace published a scorecard that ranks supermarket chains on the sustainability of their seafood. It’s a serious analysis, intended to guide shoppers to those stores that recognize their responsibility to protect the oceans, and to pressure those stores that don’t. In the argot of activists, this is known as a “name ‘em and shame ‘em” strategy.

Then Greenpeace went a step further. It ridiculed Trader Joe’s, the national supermarket chain with the lowest ranking, by creating a website called Traitor Joe’s (“Your one-stop shop for ocean destruction”), producing an amusing video (below and at www.traitorjoe.com) and sending protesters dressed as Orange Roughy to a Trader Joe’s outlet in San Francisco, calling on the company to clean up its act.

While these tactics might not be well suited for, say, the World Resources Institute, the diversity of the environmental movement is a wonderful thing. Activists at groups like Greenpeace, Rainforest Action Network or Friends of the Earth function, in essence, as the business development arms of the more collaborative, mainstream groups like the Environmental Defense Fund or Conservation International. Companies under  attack from Greenpeace or RAN often ask EDF or CI to help them dig out of trouble.

[click to continue…]