January 26, 2009

An Ode to Wal-Mart, our Fearless Green Leader.

Come again? Yup? They’re so big, that if they turn the steering wheel on their big boat toward sustainability, half the producers of goods and half the consumers of goods have to turn green along with ’em. Excerpt from today’s Times:

“Tell me why I should care about an endangered mouse in Arizona?” asked H. Lee Scott Jr., the retail giant’s chief executive, only partly in jest.

At the time, Wal-Mart was the target of a well-orchestrated assault focusing on its labor practices and environmental record. It was also straining to keep its legendary growth on track. Mr. Scott, hungry for ways to protect and transform his company, began to see environmental sustainability as a way to achieve two goals: improve Wal-Mart’s bottom line and its reputation.

So he presented his colleagues with a radical option — the “choice” that gave the meeting its name — encouraging them to adopt a sustainability program to remake the entire company, from the materials used to build stores to the light bulbs stocked on its shelves. Although participants were conflicted, a vote on the initiative was unanimous: Wal-Mart, the world’s largest retailer and biggest buyer of manufactured goods, would go green.

By virtue of its herculean size, Wal-Mart eventually dragged much of corporate America along with it, leading mighty suppliers like General Electric and Procter & Gamble to transform their own business practices.

Under Mr. Scott, who is retiring this month at the age of 59, the company that democratized consumption in the United States — enabling working-class families to buy former luxuries like inexpensive flat-screen televisions, down comforters and porterhouse steaks — has begun to democratize environmental sustainability.

For decades, many consumers felt that going green was a luxury, too, reserved primarily for those with enough money — and time on their hands — to buy groceries at natural food stores and organic clothing from specialty retailers.

Today, the roughly 200 million customers who pass through Wal-Mart’s doors each year buy fluorescent light bulbs that use up to 75 percent less electricity than incandescent bulbs, concentrated laundry detergent that uses 50 percent less water and prescription drugs that contain 50 percent less packaging.

“If all this sustainability stuff is just for the well-to-do, it’s not going to make a difference,” said Jib Ellison, the founder of Blu Skye, a sustainability consultant who has worked with Wal-Mart.

As the saying goes, Wal-Mart has also done well by doing good. Along with the McDonald’s Corporation, it was one of only two companies in the Dow Jones industrial average whose share price rose last year…

…And since the Choice Meeting, sustainability efforts have saved Wal-Mart hundreds of millions of dollars, according to people familiar with the company’s environmental initiatives. Wal-Mart declined to provide exact figures about its savings…

…He began meeting with minority groups, politicians and environmentalists. Some meetings were awkward; others were punctuated by tirades. But as it turned out, most critics did not want Wal-Mart to disappear. They wanted it to be better.

Mr. Scott used some of his opponents’ ideas to make that happen, believing that sustainability could become an advantage — saving the company money, reinvigorating its culture, allowing it to sell better merchandise and attracting and retaining talent…

…Mr. Hamburg, now chief scientist for the Environmental Defense Fund, told Mr. Scott that Wal-Mart’s earlier green initiatives were just window dressing. “So he challenged me back and said, ‘Well, we’ve taken another run at this and we’d love to have your input,’ ” Mr. Hamburg recalls.

Shortly after that conversation, Mr. Scott told the world that Wal-Mart was embracing sustainability. He laid out ambitious, possibly unattainable, long-term goals for the company: running its operations solely on renewable energy, creating zero waste and selling products that sustain the earth’s resources and environment.

Wal-Mart’s suppliers had little choice but to follow its lead.

In came the fluorescent bulbs. In 2007 alone, Wal-Mart sold more than 100 million of them. For a manufacturer, selling a bulb that lasts longer means fewer sold. But it would hurt to lose Wal-Mart as a customer. So G.E. and others ramped up production of fluorescent bulbs…

By selling only concentrated liquid laundry detergent, an effort it began last year, Wal-Mart says, its customers will save more than 400 million gallons of water, 95 million pounds of plastic resin, 125 million pounds of cardboard and 520,000 gallons of diesel fuel over three years.

“Lee pushed me,” said A. G. Lafley, chief executive of Procter & Gamble, and “we totally, totally changed the way we manufacture liquid laundry detergents in the U.S. and, now, around the world.”

Wal-Mart says it now saves itself $3.5 million a year just by recycling loose plastic and selling it to processors. After changing the design of its trucks and how efficiently it loads them, its fleet had a 25 percent improvement in fuel efficiency. Amory B. Lovins, a MacArthur fellow and chairman and chief scientist of the Rocky Mountain Institute, a nonprofit research organization, said Wal-Mart would save nearly $500 million a year in fuel costs by 2020.

While environmentalists give Wal-Mart kudos for the changes it has made, they say that much of what it has achieved so far amounts to collecting low-hanging fruit. The company sells tens of thousands of products, and has demanded the overhaul of only a handful, they say. “The jury’s out in the long term,” Mr. Hamburg says.

Wal-Mart has revised health care plans and labor practices in recent years, also important facets of its makeover…

…“He had the chance to be the Henry Ford of his generation, especially in the last few years, as the stock price soared,” said Andy Stern, president of the Service Employees International Union, of Mr. Scott. “He could have found a way to share the wealth. Instead, he became the epitome of the greed that has brought our economy to where it is today.”

Mr. Scott declined to comment. But Wal-Mart says that its average wage, $10.83 an hour for full-time workers, are competitive in the retailing industry, and that its health plans …

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