Walmart 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:
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.
WMT is going well beyond “green.” Working on its own and with other retailers, WMT is conducting audits of factories in its supply chain, particularly in China, to make sure they comply with social and human rights standards. By 2012, the company says, “all direct import suppliers” (as opposed to suppliers to its suppliers” will be required to “source 95 percent of their production from factories that receive one of our two highest ratings in audits for environmental and social practices.” WMT is also pushing suppliers to achieve higher standards of product safety, quality and energy efficiency.
Wal-Mart’s environmental efforts are truly global. The company is uying solar and wind power in Mexico, sourcing local food in China and India, and analyzing the life cycle impact of consumer products in Brazil. Alleviating hunger has become a goal of WMT’s charitable efforts, and so with CARE it is backing education, job-training and entrepreneurial programs for women in Peru, Bangladesh and India.
The company reports not just on victories but on frustrations. As you’d expect, WMT touts gains in such areas as fleet efficiency and building super-efficient, green prototype stores but it also admits where it has fallen short. But the company also said it was unable to meet a goal of eliminating PVCs from store-brand packaging because it couldn’t find a suitable alternative.
It’s harder than it should be to get a sense of WMT’s overall progress and impact. As Elizabeth Sturcken of the Environmental Defense Fund says in a Greenbiz story about the report, the report lacks context that would enable readers to assess WMT’s progress. WMT, for example, talks about keeping waste out of landfills but Elizabeth writes that
we’d like to see a report of the total volume of waste produced annually, and the change in total volume from 2008 to 2009. We’d like to know whether Walmart’s waste reduction and diversion efforts are actually resulting in a net reduction from one year to the next.
Similarly, I couldn’t figure out what percentage of WMT’s energy consumption comes from renewable energy. (I’d guess it’s very, very small.) And I’m still confused by WMT’s reporting on its carbon footprint. The company says (on p. 33) that it reduced its emissions by 5.1% in 2008, when compared to 2005, but the company also says (on p. 6) that “our company’s absolute GHG footprint continues to rise.” It’s clear that emissions per $1 million of sales are falling, and that’s progress of a sort.
WMT is just getting started. All signs are that WMT is committed to sustainability over the long term, and that’s exciting. Its efforts to measure the environmental impact of individual products are just getting started. There’s lots of room for improvement around packaging. Over time, WMT is going to democratize and popularize the idea of “green.” Check out these shelves of GE compact fluorescent bulbs.
As Elizabeth Sturcken writes:
From what we see on the ground, Walmart is indeed working hard to “broaden and accelerate” their sustainability efforts, as CEO Mike Duke says. The folks working on this at Walmart have taken to proudly wearing buttons emblazoned with a “37” representing the number of Walmart sustainability goals (though there are actually 38 with the new climate goal added in). It’s a symbol of how intently they are focused on moving forward to meet those goals.
Five years ago, few believed that WMT would have come this far.