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Wal-Mart is the world's greenest company

Only one entity can bring China to its knees—and that’s Wal-Mart.

This week, top executives from Wal-Mart are in Beijing for the company’s first global supply chain summit, according to The Wall Street Journal. At the summit, Wal-Mart brass will establish energy-efficiency requirements for all Chinese suppliers and then take those requirements to all other suppliers in 2010.

Suppliers are howling in protest because the bad economy has battered China’s manufacturing sector and Wal-Mart’s mandates are reportedly a huge upfront cost. But Wal-Mart, the world’s largest retailer by revenue, is pushing forward.

There is something remarkably unsustainable about a chain of retail stores that sell junk—food and otherwise—bound for the dumpster. Meanwhile, its actual stores swallow enormous swaths of land and burn huge amounts of power. Its trucks crisscross the world night and day.

But based on influence, Wal-Mart is easily the world’s greenest company.

Sure you could rattle off dozens of companies with plans for zero carbon emissions, even some meeting those goals right now. But a company with 20 employees and little influence—even if that company takes sulfur and uses it to somehow restore the polar ice caps—is less effective than Wal-Mart.

By applying pressure to its countless suppliers worldwide, Wal-Mart can set the agenda for sustainability faster than any government or nonprofit. Basically, Wal-Mart has created a domino effect—one fueled by money. And that, more than any social conscious, will drive any green business revolution.

Of course, someone must shoulder the high cost of doing business that sustainability requires (at least upfront). If those costs are handed down to the consumer then we’ll see if the engine that fuels Wal-Mart—the customer—really wants its big box retailer to lead the green revolution.

And later we'll worry about the wasteful lifestyles Wal-Mart encourages and sustains.

Comments (17)

Anonymous in DC:

"I don't understand why anyone would want (or need) a 5-pound bag of Skittles."

If nobody wanted (or needed) them, nobody would buy them, and WalMart would stop selling them. (And so would Costco and other retailers.)

That's how successful selling works. "Supply and demand." (I should know. I buy M&Ms in 55-gallon drums.)

Sue:

"I don't understand why anyone would want (or need) a 5-pound bag of Skittles."

If we run out of sand, we can use them for sandbags.

Tim:

Michael, you summed up the Wal-Mart perception problem in one line of one of your posts here:

"Talk to people in towns where Wal-Mart is the largest employer and provider and their upbeat tone is a far cry from what certain well-intended nonprofits and labor unions would have you think."

Ask yourself why Wal-Mart is the lone target of such negativity, when numerous grocery chains, Target, K-Mart and other big box retailers aren't even lumped in to the coverage on the periphery.

The answer, and the reason for all negative media coverage and political pressure surrounding Wal-Mart is rooted in one simple issue, it is non-union. The labor unions and their allies in politics and the media are wholey agenda-driven and have collectively decided that Wal-Mart will be "evil" until it is organized under collective bargaining. Then should Wal-Mart actually do something bad, because it is unionized, it will be deemed "good" and given a pass. To its credit, Wal-Mart management has found many ways to maintain its independence from a unionized workforce while still addressing the common good, as illustrated here and elsewhere.


Jon:

"I don't understand why anyone would want (or need) a 5-pound bag of Skittles."

I take that back. I just thought of a reason - what if your child is turning six and you are having a party with 15 other children? The 5-lb bag of skittles is a pretty convenient solution to available treats, right?

You see, even I do it, but that shows the danger of stereotyping. We both automatically assumed that if there's a 5-lb bag of skittles, it's simply there for one type of customer - the big fatty who likes to stuff his face with crap.

Maybe it's time we stop making general assumptions.

John H:

I agree that Wal-Mart is both good and evil, just like all major corporations. Those of us who cannot afford higher prices (and arguably better products) need Wal-Mart or someone else that can deliver low prices based on massive buying power.

One factor is always overlooked in discussion of Wal-Mart's greenness: sales per square foot. I know of no other retailer that matches WM in that regard, and its parking lots are usually pretty full. The footprint of the stores and lots seems unconscionable, but a couple of strip malls occupying the same square footage and generating half the traffic is a far greater waste of land as a resource. WM's efficiency isn't planned, but it gives the company an environmental advantage over its less popular competitors.

Paula:

Hear, Hear Jon! I agree with your posts. And good point Michael, Walmart is in a leadership position and can have major impact, absolutely. (Without being coerced by anything other than consumer demand and public opinion.)

Sue:

Wal-Mart is more American than Las Vegas and the house always win.

Since my paychecks started thinning out, I've gone generic (at least it rhymes with organic).

If I could find something cheap and green, maybe I'd be able to justify shopping there to my peer group.

Jon:

"living in a wealthy society about a free market"

That "about" was supposed to be "and" by the way.

Jon:

" I think, for our bad habit of buying unnecessary and sometimes harmful products because they're cheap"

Michael. I couldn't agree more. As you can probably tell, I'm one of the biggest proponents of free-market captialism you'll ever encounter. But I first and foremost have a great disgust for waste. I don't understand why anyone would want (or need) a 5-pound bag of Skittles.

But like you said...that's the customer's decision. In a nutshell, that's the best part about living in a wealthy society about a free market unpenetrated by government control - you can have your 5-lb bag of skittles if you want. You have the right to become morbidly obese and have a heart attack or throw yourself into a diabetic coma if you so choose.

The danger lies in when our concept of what is right or how people should be have enters into the political arena. For instance, it doesn't affect me one way or the other if you're morbidly obese and suffer the consequences health-wise...unless I'm now paying for YOUR health care. The personal health of others is a concern of a socialist society, not a free one. There's a quote I always repeat, but I don't remember who said it: "If you're not free to choose irresponibly, you are not free."

But we're already seeing this kind of fascist, do-gooder, "we know what's good for you" legislation - i.e. seat-belt laws, or the law in New York City and other cities that have outlawed trans fats. Imagine... a municipality in the United States of America telling you that you can't serve trans fats in your privately-owned establishment to which people have the free will to frequent or not.

I think we're going to see it come to a greater extreme under Obamacare.

Like I said, I have no patience for waste or gluttony, but I'll be damned if I'll send the government after anyone because they're doing something I think is harmful to them (and that doesn't affect others).

If you don't like what the kind of people who shop at Wal-mart (and I do, by the way) are doing to themselves... it's simple. Don't go to Wal-Mart.

Joan H.:

Michael: You would never have questioned that 5# bag if it had been peanut M&Ms! Snack compulsions can sometimes require a bulk package. In my case, it may be that or a PMS-driven murder spree.

Michael Sebastian:

@Jon - interesting link.

I was in a Wal-Mart in Minnesota last year and noticed a 5 lb bag of Skittles. It wasn't Halloween; it was February and these weren't shaped like hearts. Why would anyone need a 5 lb bag of Skittles?

The Skittles are a metaphor, I think, for our bad habit of buying unnecessary and sometimes harmful products because they're cheap. Of course, that is the consumer's fault more than anything else, but I still don't like that Wal-Mart--and other big box retailers--enable it.

However, I DON'T think they should be driven out of business or vilified for that. And I DON'T think Wal-Mart is a horrible company.

Talk to people in towns where Wal-Mart is the largest employer and provider and their upbeat tone is a far cry from what certain well-intended nonprofits and labor unions would have you think.

@Mike - Wal-Mart paid me handsomely for this post ... in Skittles.

Joan H.:

I was on the board of directors for our local non-profit recycling center. WalMart assisted us immeasurably. WalMart reserves space on barges to Alaska both coming and going, in order to ensure that they always have the ability to move their products quickly. The containers going south are mostly empty. WalMart offered up the use of those containers, as well as the use of their trucks, for our recycling center to transport recyclables south to the Seattle area where the materials can be recycled. Because we received compensation for the recyclables, thanks to WalMart's contribution, our little nonprofit made far more money than it would have otherwise, because we weren't paying shipping and transportation costs. They didn't get anything out of this arrangement except goodwill--in fact, it cost them money. It may have been a small contribution in their huge budget, but it was a huge contribution to our small one.

I'm not a WalMart fan, as stores go. I think their employment practices are far from stellar. But in my community, especially as the cost of food and basic supplies keeps increasing with the price of fuel and transportation costs to get supplies to Alaska, I'm grateful that there is a low-priced alternative for shopping to keep costs down in family being pressed harder by the day. And their contributions to our committed volunteers who give us options for recycling--well, that was just plain neighborly.

Jon:

"In a way, this reminds me of the criticism leveled at the U.S., where bipartisan administrations refused to sign Kyoto."

Ike - I agree with your post, but allow me to diavow this very popular minsconception.

Here's how the whole Kyoto thing happened:

A year before the Kyoto conference, it was pretty much assumed that the U.S. would adopt the protocols. Then the Congress looked into it and saw how harmful living up to the Kyoto standards would be. They then issued a statement to the Clinton administration right before they left for Japan and said they would not approve any international agreement that would do harm to the U.S. economy.

U.S. Presidents can sign all the international treaties they want. It makes little difference because their signature alone does not an agreement make. They need ratification from Congress.

So Clinton signed it in 1997. From that point on, he made no attempt to send it to Congress. The only difference between Clinton and Bush on this issue is that Bush stated publicly that he would not send the Kyoto agreement to Congress. Clinton just didn't do it but didn't tell anyone - and the media didn't call him on it. So all the statements I've heard accusing Bush of not signing the Kyoto treaty are ridiculous. It's already signed!

What's worse - the Congress could ratify it any time they want! They don't need to wait for the president to send it to them.

So, in other words, the Democrats - champions of the "working man" and the environment - are in no greater hurry to ruin the U.S. economy than the Republicans. Because they know if they actually made a real attempt to adhere to Kyoto's standards (and no country that has signed it has made any real attempt. Carbon emissions all across Europe are about twice what they were pre-Kyoto), people would be out of jobs and they'd be voted out during the next election.

So, you see by Michael's post, the private market is doing what the government not only doesn't want to do, but is incapable.

Jon:

"And later we'll worry about the wasteful lifestyles Wal-Mart encourages and sustains."

Wal-Mart is a horrible, horrible company. Imagine...selling a great variety of products that people want at prices that those of lower income are able to afford while simultaneously providing 20 times the number of jobs any one mom-and-pop store could offer.

Disgusting really. We have to put a stop to this!

http://townhall.com/columnists/column.aspx?UrlTitle=the_freedom_to_hate_wal-mart&ns=PaulJacob&dt=11/20/2005&page=full&comments=true

" If those costs are handed down to the consumer..."

ALL costs are handed down to the consumer. Which really makes me laugh when I hear about people wanting to stick it to corporations with higher taxes and more regulations. Listen up. Here's one thing you have to get through your head: Corporations DON'T PAY TAXES!!! That's ALL passed down to the consumer. Every time our benevolent, Robin-Hoodesque government imposes a tax on the greedy corporations or imposes regulations (this, increasing the cost of doing business), it all gets passed to the consumer.

So, if you think it's corporate America that's stealing your money, think again. It's, in fact, the greatest monopoly in modern age: The U.S. Government. But unlike Wal-Mart or those evil oil companies, the government accumulates much greater amounts of wealth and doesn't have nearly the level of efficiency. Can you name one company, no matter how large, that could sustain a $10 trillion debt?

Janet:

I live in Arkansas and feel I must defend Wal-Mart since no one else will. Wal-Mart's trucks criss-cross the land because we don't have decent railroads or other alternatives. Junk food is also available at Kroger and at the Mom & Pop store down the street from me. Don't blame Wal-Mart for our wasteful lifestyles. You can waste just as much without ever setting foot in Wal-Mart. But it will probably cost you more money, and you'll probably burn more gas driving to multiple locations.

One huge store doesn't use any more land or energy than several smaller stores. A super-Walmart doesn't just sell groceries and cheap household goods. It's a pharmacy, an optometrist, a photographer and a lot of other businesses rolled into one. Like it or not, that's probably the way of the future.

I'm glad Wal-Mart is putting the pressure on its suppliers. And I'm glad people are putting pressure on Wal-Mart to be socially responsible, because we know what will happen if we don't hold a huge company like that accountable for its actions.

Wal-Mart isn't evil, at least not any more so than any other big company. Wal-Mart is American. It's ugly and beautiful at the same time, just like the rest of America. It was once a small company, just like the small companies that it's supposedly driving out of business. Sam must have done something right.

Mike McCurdy:

Wow, how much money did Walmart pay you to write this astroturf?

Ike:

Going back to my previous blog, I've always maintained that Walmart did not get the credit it deserved for innovating and making things happen.

In a way, this reminds me of the criticism leveled at the U.S., where bipartisan administrations refused to sign Kyoto. (A stark contrast to the morally-superior nations that did sign, then promptly ignored all the targets or even regressed.)

As to the "wasteful lifestyles," that's a demand-side issue. Walmart is taking care of everything it can on the supply-side, because deep down it does make economic sense if you can operate at scale.

And once we all start wanting more sustainable lives and products - and chasing that want with real dollars - I'm willing to bet you'll see the big box retailer dancing to the tune.

(Disclaimer. I've never worked for Walmart. Never been paid by Walmart. Never gotten gifts or compensation from Walmart, nor from anyone else on behalf of Walmart. I own no stock in Walmart. Return to top of graf, replacing 'Walmart' with 'Edelman,' and it's all still operative.)

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This page contains a single entry from the blog posted on October 23, 2008 9:29 AM .

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