I’m sure many of you have the same perception about Walmart: a place where one can buy my almost everything at a low price yet a ruthless greedy company known for its polemic practices.
However, think twice. Walmart might not be the first company that acted on climate change, but it was definitely the one that had the most impact on the whole retail industry. Back in 1990, the company pushed its suppliers to eliminate the paperboard box that used to packed deodorants . It added nothing to the customer experience and, therefore, was an unnecessary cost: it occupied shelf space, increased shipping fuel costs and costed money to produce. The impact was immediate: not only suppliers eliminate the unuseful box for Walmart, but they also did so to the entire industry. Result: millions of trees were not cut down, billions of deodorant boxes didn’t end up in landfills. Thanks to who? Yep, Walmart!
In 2008, Walmart’s CEO and President Lee Scott, delivered a famous speech addressing his personal commitment for shaping “the company of the future” , taking the opportunity to explore some of the company milestones on sustainability. Back in 2005, Walmart embraced environmental practices as a way to improve the company bottom line and reputation .
Walmart committed to several long-term goals such as running its operations solely on renewable energy, creating zero waste and selling products that sustain the earth’s resources and environment .
True, you can argue that Walmart’s honest motivations weren’t our planet well-being, but the shareholders’ money: the sustainability efforts have saved millions of dollars to the company. However, it also forced suppliers like General Electric and Procter & Gamble to transform their own business practices . Walmart push for fluorescent bulbs (use up to 75% less electricity than incandescent bulbs) resulted in more than 100 million units sold only in 2007. For GE, selling a bulb that lasts longer means fewer sold. But which company will dare to lose Walmart as a customer? GE had no other alternative other than increase production of fluorescent bulbs . And this created a snowball effect that culminated in more Americans adopting incandescent bulbs, reducing overall emissions.
Procter & Gamble was Walmart next target: it announced an initiative to cut the bottle size of liquid laundry detergent by reducing in 25% its amount of water. The result: concentrated liquid laundry detergent saved 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 .
Walmart seemed to have nailed the concept: the herculean company pushed prescription drugs manufacturers to reduce in 50% its products packaging and increased its fleet fuel efficiency by 25% changing the design of its trucks and optimizing how trailers are loaded and filled .
Walmart, I know you can do better
Fact is, Walmart started with the right foot: 26% of its electricity is supplied by renewable energy, 38% in plastic bag waste reduction (this actually represents 10 billion bags annual reduction!) and pressure to suppliers to adopt an increasing amount of recycled content, both in products and packaging .
Impressive, no? Well, not really. The company deserves recognition for its initiatives, but let’s add a little of context. Other companies have done better, using even more renewable energy for its operations. Google, for example, uses renewable energy to power 37% of its operations. For its zero waste goal, Walmart is facing one of its main challenges: waste recycling costs the company money to dispose, manage and sort. For some material streams, however, it is simply cheaper to toss it. Walmart must engage in finding cost-effective recycling solutions, in especial to hard-to-recycle materials. The company appetite to pay extra to do the right thing should outset its short-term financial goals. This, indeed, is the real challenge the company is facing: how far its commitment to be being sustainable is reachable when the always low prices is the company untouchable karma?
Finally, for the waste reduction commitment, Walmart ought to do more than just pushing suppliers to be more eco-friendly . Walmart should better communicate sustainable products to its customers as well as employ a more intense promotion campaign on greener products to stimulate buyers’ consumption/awareness. The company did launch a web page to identify products from sustainable companies , however with a limited scope and a questionable company selection criterion: selection based on overall Walmart’s Sustainability Index in each of several product categories, rather than on the products themselves.
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