Edward Humes' new book about Walmart's efforts to be more environmentally responsible - an effort, by the way, the company started begrudgingly - is both hopeful and terrifying.
The book, "Force of Nature: The Unlikely Story of Wal-Mart's Green Revolution," details the ongoing evolution of the world's largest retailer into a leader of sustainability. After initial doubts, the company discovered that going green actually boosted profits - and now is urging its 100,000 suppliers - and competitors - to join in.
Humes writes, "Wal-Mart has made it impossible for any corporation to claim plausibly that sustainability is a risky choice." That bodes well for the green movement. Walmart's clout is without question, and can only be a catalyst.
The terrifying part rears its head about half way through, when Humes, a Pulitzer Prize winner, updates calculations of an earlier study by a professor of ecological economics who put a value on nature's assets: "(By 2010), Ecosystems were being used up or destroyed at a rate of $2 to $5 trillion a year. At that rate, factoring in current growth in population and manufacturing set against nature's innate ability to replenish itself, the world's natural capital - fresh air, fresh water, all the things we depend upon - will be depleted by the year 2046," Humes writes.
That is only 35 years away. My daughter will be 54 years old. I hope those calculations are off for the sake our our future - and for my daughter and grandchildren. Tom Miller, an environmental analyst that Humes quotes extensively, predicts an increase in worldwide pressure and a demand for stronger regulations as the deteriorating environment becomes more obvious to ordinary citizens.
The idea that Walmart is helping lead the change is remarkable. After all, this is a company that people love to hate - and by 2004 it was swimming in hate. It was being hammered for an employee health-care program that many claimed was a joke, and for poor wages and other issues - which are duly noted in the book. Walmart's reputation was so bad that, as Humes notes, it was "the poster child for global warming, mass extinction, smog and urban sprawl."
The negative news was taking a toll; an internal Walmart study showed that up to 8 percent of its customer base had stopped shopping there.
So, then-CEO H. Lee Scott started looking for something positive, a program that Walmart could tout. The idea came from board chairman S. Robson "Rob" Walton, the eldest son of the late Sam Walton, who founded the company. Rob Walton, who was interested in environmental causes, hooked Scott up with environmental consultant Jib Ellison.
In the book, Scott sounds like someone who really didn't believe "green" was profitable, but Walmart needed to do something, and carving out a small sustainability niche might help. The first focus: waste.
What it discovered would fundamentally change the company - at least when it came to sustainability.
Walmart is one of the leading sellers of toys on the planet. Shrinking the package on one toy allowed the retailer to stuff more packages in a truck, which, reduced the number of truck trips and cut its fuel bill by a whopping $2.4 million per year. It was so simple, yet no one in Walmart had ever considered it.
As Humes notes, "That was significant for a low-margin retailer...The company would have had to sell $60 million worth of that toy to earn the same $2.4 million in profits."
Walmart had become a believer.
That led to an expanded effort - and to solar panels, windmill turbines and fuel cells on buildings; a drive toward sustainable agriculture (Walmart says it can save money by purchasing food closer to its stores); and, as of now, an 80 percent landfill diversion rate. The company is even working on an ambitious landmark sustainability index for suppliers to follow.
With more than $14 billion in profit last year, Walmart can pretty much set the agenda. Today, it has set three main objectives: using renewable power to supply all of its operations, to create zero waste and to sell products that are environmentally safe. For example, phosphates in dish and laundry soaps on Walmart shelves in Canada, Mexico, Central America and South America were cut almost 30 percent last year. - and have been removed entirely from its stores in the U.S., Humes notes.
Who knows how far Walmart will go. It certainly has the financial resources to create a major green footprint. Many people remain skeptical, calling it greenwashing. But, as Humes says, the younger generation is concerned about the environment, and Walmart knows it has to find a way to capture them.
Humes cites John Fleming, a former chief of merchandising for Walmart: "This is our opportunity to connect with the next generation..."
As the world's largest retailer, Walmart can help drive the green agenda. Here is a link to a video on Walmart's sustainability plan.
Company photo of windmills at Walmart store in Palmdale
No comments:
Post a Comment