Wal-Mart

Tarnished gold?

September 3, 2008

Gold mining is a dirty business, for many reasons. In poor countries, where most of the world’s gold is mined, regulations are lax, cyanide is commonly (and carelessly) used to separate gold from waste rock, and children work under unsafe conditions, literally scratching out a living from the earth. These problems have been well-documented by NGOS and by reporters for the New York Times, which did a great series on gold in 2005, and more recently in this fine investigative article by the Associated Press.

But corporate America is responding with an ambitious effort to reform the mining industry, led by Tiffany & Co., Wal-Mart, independent jewelers and NGOS. Forward-thinking mining companies like Rio Tinto are on board, too. My new feature story, Green Gold, which appears in the Sept. 15 issue of FORTUNE, looks at their efforts. You can also watch a video of me talking about gold mining (which, if nothing else, tells you why my future lies in print journalism and not on television).

I’m fascinated by this story because it’s emblematic of what is happening in many other sectors of the global economy. Essentially, brand-name retailers, egged on by activist groups, are joining forces to clean up their supply chains, often with a goal of setting standards and certifying products as “green.” You can see it in forestry where retailers like Staples, Office Depot and Home Depot have been persuades by NGOS Forest Ethics and Rainforest Action Network to back standards set by the Forest Stewardship Council. You can see it in fishing where Unilever, McDonald’s and Whole Foods Markets endorse the standards set by the Marine Stewardship Council. The model is coming to the soy and palm oil industries as well, as I recently wrote.

In each sector, one big task of the environmental movement is to “de-commoditize” commodities so that responsible retailers and consumers can use their purchasing power to reward the most environmentally-friendly producers and suppliers. The gold mining story is particularly interesting in this regard because gold is the quintessential commodity: gold from numerous sources is literally melted into bars. Right now, retailers and consumers for the most part don’t know where their your gold is coming from. The idea of “traceability” is a key to efforts to reform mining, and Wal-Mart, to its credit, has worked diligently to find ways to trace gold from mines to market. The first result of its efforts is a new line of jewelry called Love, Earth that debuted this summer.

Here’s how the story begins:

The Bingham Canyon open-pit mine is the biggest hole dug by man anywhere in the world – about 2 1/2 miles long and nearly a mile deep, according to its owner, Kennecott Utah Copper. Miners have been digging copper, silver, and gold out of Bingham Canyon, just outside Salt Lake City, since 1906. These days huge trucks that cost up to $3 million each work around the clock, hauling about 450,000 tons of dirt out of the earth each day. More than 99% is waste. But by expending vast amounts of energy – the mine operates its own coal-fired power plant – Kennecott is able to extract an average of about 795 tons of copper, 12,000 troy ounces of silver, and 1,400 ounces of gold a day.

It’s the gold that Pam Mortensen has come here to see. Mortensen, 52, is in charge of buying fine jewelry for Wal-Mart (WMT, Fortune 500). And recently she has moved the world’s largest retailer to the forefront of a loose alliance of businesses and environmental groups that have set out to clean up gold mining, one of the world’s dirtiest industries.

You can read the rest here online, but it looks and reads much better in the magazine with photographs from Bingham Canyon, as well as portraits of Pam Mortensen and Tiffany’s very impressive CEO, Mike Kowalski.

I hope to have more to say about gold mining in another blog post where I’ll look at the roles of two NGOs, Earthworks and Conservation International, and some controversy over their differing approaches.

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Do food miles matter?

July 14, 2008

There’s no doubt that buying and eating local food is a hot trend. But is it good for the environment?

Recently, I got a press release from Wal-Mart saying that

Partnerships with local farmers have grown by 50 percent over the past two years—one example of the company’s efforts to support local economies, cut shipping costs and provide fresh food offerings.

For the 4th of July, a Wal-Mart Supercenter in DeKalb County, Ga., featured Georgia-grown Vidalia onions for burgers, Georgia cantaloupes and watermelons for fruit salad and Georgia peaches for cobbler, the company said.

Meanwhile, Chipotle Mexican Grill reports that it has stepped up its efforts to buy local produce. The fast food chain says it is the first and only national restaurant company committed to buying local on a significant scale:

Chipotle will purchase 25 percent of at least one of its produce items for each of its 730-plus restaurants from small and mid-sized local farms. The produce, which includes romaine lettuce, green bell and jalapeno peppers, and red onions, will arrive from local farms when seasonally available

What’s more, locally grown produce was voted No. 2 on a list of nearly 200 hot trends for 2008 in a survey of more than 1,200 professional chefs conducted by the Natural Restaurant Association. (Bite-sized desserts led the list.) A week or so ago, my wife and I tried a brand-new restaurant called Redwood in Bethesda, sure enough the menu is filled with beef, cheese and produce from the mid-Atlantic states.

Last week, too, The New York Times ran a story about community-supported agriculture on its front page—a reliable lagging cultural indicator, as ever.

Now, I’m a fan of local eating. Since joining a CSA last year, I’ve consumed a lifetime’s worth of Swiss chard. Buying local food supports the local economy, cuts down on shipping costs and greenhouse gases, encourages (or requires) consumers to broaden their palette of food choices (i.e., the chard) and gets fruits and vegetables to the table when they are fresher. That’s all laudable.

But before we get carried away, let’s keep a couple of things in mind. The first is that being a locavore is utterly impractical for the vast majority of people. It’s no surprise that the local-food movement is most popular in northern California, where you can get fresh produce year-round. I’m currently on vacation in Alaska where, as best as I can tell, they grow berries, catch a lot of fish and kill caribou. Not exactly a balanced diet—in fact, it makes me wonder how the Native Alaskans survived for as long as they did without imports. I enjoy a banana on my cereal or in a smoothie, and they don’t grow in the continental U.S. (Pity the farmers of Costa Rica and Ecuador if we were all to become locavores.)

The other thing to remember is that what we eat, and how it’s produced, matters a lot more to the planet that where our food is grown. As I’ve written before, the single easiest thing any of us can do to help prevent global warming is to eat less meat. This is confirmed by a life cycle assessment by Christopher Weber and Scott Matthews of Carnegie Mellon University, who found that when it comes to greenhouse gasese, food miles matter a whole lot less than agricultural production:

They found that transportation creates only 11% of the 8.1 metric tons (t) of greenhouse gases (in CO2 equivalents) that an average U.S. household generates annually as a result of food consumption. The agricultural and industrial practices that go into growing and harvesting food are responsible for most (83%) of its greenhouse gas emissions

Small changes in dietary habits can have significant environmental impacts, they report:

Replacing red meat and dairy with chicken, fish, or eggs for one day per week reduces emissions equal to 760 miles per year of driving. And switching to vegetables one day per week cuts the equivalent of driving 1160 miles per year.

That’s because everything we eat comes from plants, whether we eat the plants directly or rely on an inefficient animal intermediary to process them for us, as the excellent new website of the Peanut Butter and Jelly campaign points out:

The basic problem is that animals are inefficient at converting plants into meat, milk, and eggs. Relatively little of what they eat ends up in what you eat because animals use most of their food to keep them alive – to fuel their muscles so they can stand up and walk around, to keep their hearts beating, to keep their brains working.

That cow, pig, or chicken has to eat a lot more protein, carbohydrates, and other nutrients than it yields in meat, eggs, or milk. The result is that it takes several pounds of corn and soy to produce one pound of beef, or one pound of eggs, one pound of milk, etc. This holds true even if we’re measuring calories or protein; it takes several times the calories or protein in livestock feed to produce the calories or protein we get from the meat, eggs, or milk.

Check out the PB&J campaign. It’s the creation of a young Wesleyan graduate who we will call Bernard Brown. (He has a day job, and isn’t sure how his employer feels about his campaign on behalf of peanut butter sandwiches). “If you have a PB&J instead of a red-meat lunch like a ham sandwich or a hamburger,” he says, “you shrink your carbon footprint by almost 3.5 pounds of greenhouse gas emissions.”

Bernard’s little web startup, launched early 2007, has generated some interesting ripples, including coverage in Good Housekeeping magazine and support from, of all places, the giant food services company Sodexho which worked the PB&J campaign message into Earth Day events on several college campuses. He’s even designed a PB&J campaign T-shirt (made with organic cotton, natch) and baby bib.

No offense to the locavores, but I’ll take a PB&J sandwich over a plate of Swiss chard any day.

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Wal-Mart’s sustainability czar

June 17, 2008

I continue to be impressed by the scope and seriousness of the sustainability work being done at Wal-Mart. The company is reaching deep into its supply chain to try to wring out waste and develop “greener” products. They’re planning a major push around environmental and social issues this fall in China. All important, interesting stuff.

Last week, I interviewed Matt Kistler, WMT’s senior v.p. for sustainability, at the inaugural Greener by Design conference. He’s an affable guy with a real passion for environmental issues. I’m joking, though, when I call him the “sustainability czar”—it’s just the opposite. WMT is driving better practices in the company through “sustainability networks” that are organized around products and themes. There are networks for the food, apparel, jewelry, packaging, buildings, the fleet, China and the like. Each one is led by a WMT employee (who still must do his or her “real” full-time job) and it draws upon a network of suppliers and NGOs who “volunteer” their time. When it works, this model extracts the best thinking from people who care about the issue and, at the same time, embeds greener practices deep into WMT rather than in a centralized corporate-reponsibility or environmental office. Critics say it amounts to low-cost outsourcing, and that some networks haven’t accomplish much.

I wrote about Kistler’s work in today’s Sustainability column for cnnmoney.com and fortune.com. Here’s how it begins:

Get ready to pour your milk out of a square jug.

Sam’s Club, a unit of Wal-Mart Stores, sells gallons of milks in square containers in some stores. They come that way so shippers can stack more gallons into a truck, saving money, fuel and greenhouse gases. It turns out that the square milk jugs are easier and quicker to ship, therefore fresher when they hit the shelf.

And so – like concentrated laundry detergent, environmentally-friendly cleaning products and compact fluorescent light bulbs, all of which are being pushed by Wal-Mart – square milk jugs are likely to find their way into tens of millions of American homes.

“We’re looking everywhere we can to save energy and eliminate waste,” says Matt Kistler, the giant retailer’s senior vice president for sustainability.

Yes, I’m well aware that WMT’s big-box, import-dependent business model is far, far from sustainable. (So are the people inside WMT. They’re not dumb.) But there’s just no doubt that the company is moving in the right direction. You can read the rest here.

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Small steps

June 8, 2008

To save the planet, we need to take a handful of big steps, like regulating greenhouse gas emissions. We also need to take many, many small steps, like recycling, buying paper from sustainably-harvested forests and using less packaging. Last week’s high-profile defeat of the Lieberman-Warner bill to regulate greenhouse gases was a significant setback, a big step that won’t happen for at least another year.. So this posting will look at some small steps towards a cleaner planet that have not gotten as much attention.

We’ll start with Best Buy. Thanks in part to the work of an effective shareholder activist group called As You Sow, Best Buy announced last week that it will test a free recycling program that will offer consumers a convenient and safe way to get rid of old TVs, computers, cell phones and other unwanted gadgets. The trial will be offered at 177 Best Buy stores in eight states. The company already had an active recycling program, available when consumers bought a new product from Best Buy. The big change here is that Best Buy will take back e-waste that it did not sell.

Conrad McKerron, an activist with As You Sow, told me via email:

As You Sow has been in dialogue with Best Buy, the largest U.S. electronics retailer for several months, and filed a shareholder proposal with the company last fall asking it to look at using its stores for free take back of electronic waste, including TVs, and to partner with electronic manufacturers to develop a workable, convenient national collection system. We withdrew the proposal in exchange for an agreement by the company in April to develop a large scale pilot to test in-store recycling of electronics. They are now ready to roll out a pilot that will offer free take back of most consumer electronics, including TVs, at 117 of their stores in three areas – here in the SF Bay Area, Minneapolis and Baltimore. We believe this represents the first on-going large scale take back of consumer electronics offered by any major retail chain.

This is especially significant because of next February’s switchover from analog to digital TV broadcasting, which could render millions of old TVs obsolete. The ultimate goal—and we are gradually getting there—is for all manufacturers to assume responsibility for take-back all their products, as Dell and HP have for their hardware. (I recently shipped a couple of old printers back to BP, and the system worked well.) Sony’s the leader in the TV industry; its competitors have yet to come along. Best Buy could give them a push.

Speaking of HP, the company recently announced a comprehensive new paper-buying policy, developed in cooperation with NGOs Forest Ethics and World Wildlife Fund. We’ll spare you most of the (boring) details; suffice it to say that HP will set goals for all of its worldwide operations, maximize the use of recycled paper, give preference to papers certified by the Forest Stewardship Council, and report publicly on all of this. The paper products covered under HP’s new policy amount to more than 300,000 tons, including its retail printing paper, all packaging, promotional materials, and internally used paper.

Will Craven of Forest Ethics tells me that a growing number of companies are taking responsibility for the environmental impact of the paper they use. Among them are Limited Brands (after an activist campaign targeting the Victoria’s Secret catalog), Patagonia, REI, Crate & Barrel, Williams-Sonoma, Timberland, Nordstrom’s, and LL Bean and Dell. Visit www.ForestEthics.org or www.catalogcutdown.org for more info.

Finally, Wal-Mart marked a milestone recently—it now sells only concentrated liquid laundry detergent in all of its U.S. and Canadian stores, having phased out those wasteful, oversized jugs of Tide, All and the like. Essentially, Wal-Mart muscled its suppliers to ship their detergent in more compact containers, saving water, plastic, shipping costs and shelf space (in the stores and in your laundry room). It’s part of the company’s ambitious goal to reduce the packaging (and waste) of everything it sells.

Since about 25% of all the liquid laundry detergent sold in the U.S. is sold at Wal-Mart stores—yes, the company is THAT big—this means the beginning of the end of those oversized containers.

I’m interviewing Matt Kistler, Wal-Mart’s senior vice president of sustainability, later this week at a conference called Greener By Design organized by my friend Joel Makower. After we talk, I’ll report back on other WMT initiatives aimed at reducing packaging and designing products with a lighter environment footprint.

Given the reach of Best Buy, HP and Wal-Mart, these aren’t really small steps—they’re major steps. But let me be clear: They are no substitute for the big steps, like climate-change legislation, that will be required to bring about the change we need, at the scale we need, in a hurry.

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