By Ylan Q. Mui
Washington Post Staff Writer
Friday, November 16, 2007
Two years ago, Wal-Mart chief executive H. Lee Scott Jr. outlined ambitious goals to turn the world's largest retailer into a more environmentally friendly company. In a speech titled "21st Century Leadership," he vowed that Wal-Mart would one day create zero waste, be completely supplied by renewable energy and sell more sustainable products.
That day remains a long way off.
Wal-Mart yesterday released its first report on its progress in meeting those goals, and showed mixed results. It has made significant gains in some areas, selling 22 seafood products that have been certified as sustainable by the Marine Stewardship Council and developing the first heavy-duty hybrid truck. But on other hot topics, such as pollution in China and eliminating waste, it is still grappling with where to begin.
"We make no claims of being a green company," Scott said in a written statement. "But what we are saying is we're doing sustainability in a way that's real and right for Wal-Mart."
Some environmental and activist groups have remained skeptical of Wal-Mart's intentions and its progress. In September, a coalition known as the Big Box Collaborative organized 23 nonprofit organizations to deliver a harsh critique of Wal-Mart's sustainability initiative, arguing that it mislabeled organic food and that the large number of stores it plans to open will negate efforts to decrease its greenhouse-gas emissions. According to Wal-Mart's report, the company's global carbon dioxide output rose 9 percent, to 20 million tons, last year.
"Working with Wal-Mart is a little like dealing with Dr. Jekyll and Mr. Hyde," said Michael Marx, executive director of Corporate Ethics International, which contributed to the critique. "Environmentally, I really believe it wants to do the right thing. The Mr. Hyde Wal-Mart often turns around and does terrible things to totally undercut all its good work."
To tackle its environmental goals, Wal-Mart set up more than a dozen "sustainable value networks" that connect its employees with suppliers, advocacy groups and independent experts to work on hot button issues such as consumer electronics, jewelry and packaging. Some networks have 15 members; others have 500. Meetings end with what the company calls "go-do's," as in "What are you going to go do now?"
Wal-Mart's foray into sustainability has resulted in some unlikely bedfellows, with groups such as the National Defense Resource Council and Oxfam working with Wal-Mart on select issues.
This summer, Environmental Defense opened an office in Bentonville, Ark., where Wal-Mart is headquartered, with two staff members, Michelle Harvey and Andrew Hutson. They were there to work with Wal-Mart on its environmental goals. Shopping at the Wal-Mart near Harvey's house -- "my Wal-Mart," she called it a few months ago while pulling up in a minivan that still bore a Takoma Park bumper sticker -- she and Hutson ran into Charles Zimmerman, vice president of prototype and new format development. He was inspecting the new motion-detection lighting system in the frozen food section, which helps save energy by turning the freezer lights on when someone approaches and turning them off when they leave. Zimmerman slowly crept down the aisle to test their sensitivity.
Harvey bounded over to shake his hand. She peppered him with questions about refrigeration: What is Wal-Mart doing about the open vertical cases in the dairy aisle, where cold air escapes into the store? What about the horizontal cases that store sausage and egg biscuits and turkeys?
Hutson explained that Wal-Mart has what he called a "ready, fire, aim" culture. "Part of our reason for being here is to help them aim better," he said.
When Wal-Mart does aim correctly, its size has the potential to turn even the smallest tweaks into landslide changes. The sustainability report cites the example of the Charmin 6 Mega Roll pack, which contains the same amount of toilet paper as a regular pack of 24 rolls. That allows Wal-Mart to ship 42 percent more units on their trucks, eliminating 89.5 million cardboard rolls and 360,087 pounds of plastic wrapping and reducing its fuel consumption by 53,966 gallons.
But progress across the sustainable value networks has been uneven. Wal-Mart has set a goal to reduce solid waste from its U.S. stores by 25 percent by next October. But it is still developing a system to track waste through its supply chain and admitted in the report that it has no accurate way to measure how much it may have already eliminated.
Wal-Mart also estimated in the report that it buys goods directly from thousands of factories in China and its suppliers source products from many more. It also recognized that the country's tremendous growth -- which critics say is fueled in part by Wal-Mart's insatiable demand for low-cost goods -- "does not come without unintended consequences."
The China network, however, is still putting together a model factory program to showcase best practices with 13 volunteer suppliers. But exactly how those factories can be more environmentally friendly while staying profitable is up for debate.
"We are proud of our first steps, but the challenges we face are significant and complex," the report said.
Still, several environmental groups applauded Wal-Mart for putting out the report, which was originally scheduled to be released this summer, even as they cautioned that more work needed to be done.
"It gives Wal-Mart the opportunity to kind of take a hard look in the mirror," said David Willett, a spokesman for the Sierra Club, a nonprofit group that has been critical of Wal-Mart and has not worked with the company. "I think we still need to see some more from them to show really how committed they are."
In the report, Wal-Mart acknowledged that expectations of the company are high -- and so are its goals. In a recent interview about the environmental initiative before the report was released, S. Robson Walton, son of Wal-Mart's founder Sam Walton and chairman of Wal-Mart's board of directors, said that he was not worried if the company never achieved them.
"A lot of our goals are aspirational," he said. "I think the things that we've accomplished so far have been significant. . . . It's the progress that's important."