Home / Marketing / Wal-Mart

Wal-Mart

The world’s biggest corporate in green farming practices. The biggest seller of organic milk in the world. The biggest buyer of organic cotton in the world. Wal Mart goes green and is soon coming to India.

Doesnot it feel good to have this kind of commitment made by the company that you are part
of? Don’t you feel proud?”The 800 Wal-Mart Stories employees gathered in the home office for an all-day meeting were used to this kind of rah –rah talk. Top executives from FORTUNE 500 companies regularly trek to Bentonville, Ark., to pay homage to one of the word’s most powerful companies and to shout out the Wal-Mart cheer. This time, though, the cheerleading was coming from an unlikely source: Al Gore.

Wal-mart had invited America’s most famous environmentalist to show his movie, An Inconvenient Truth. “Having the former Democratic Vice President was a shock’’ to some people at the company, chief executive Lee Scott told the crowd. “At least based on a couple of my e-mails.”

But as the credits rolled Gore strutted onto the stage to a standing ovation. Dressed in a blue suit and cowboy boots, he joked with the audience, answered questions in his best Southern drawl, and coyly denied that he had any plans to run for President again. (This wasn’t exactly his base: He took just 32% of the vote in Benton country in 2000.)

Before heading off to dinner with Wal-Mart chairman Rob Walton and Scott, Gore delivered a parting thought: As Wal-Mart embarks on a far-reaching plan to adopt business practices that are better for the environment, he said, the world will learn that “there need not be any conflict between the environment and the economy”.

Wal-Mart CEO, has decided to help save the earth. Just listen to Scott. “ To me” he says , “ there can’t be anything good about putting all these chemicals in the air . There can’t be anything good about the smog you see in cities. There can’t be anything good about putting chemicals in these rivers in Third World countries so that somebody can buy an item for less money in a developed country. Those things are just inherently wrong, whether you are an environmentalist or not”.

In a Speech broadcast to all of Wal-Mart’s facilities last November, Scott set several ambitious goals; Increase the efficiency of its vehicle fleet by 25% over the next three years, and double efficiency in ten years. Eliminate 30% of the energy used in stores. Reduce solid waste from U.S. stores by 25% in three years. Wal mart says it will invest $ 500 million in sustainability projects, and the company has done at lot more than draw up targets. It has quickly become, for instance, the biggest seller of organic milk and the biggest buyer of organic cotton in the world. It is working with suppliers to figure out ways to cut down in packing and energy costs. It has opened two “green” supercenters.

Plenty of people won’t buy it – or anything else from Wal Mar To labor leaders, left-wing elites, and the small is beautiful crowd, the $ 312-billion-a-year retailer stands for everything that’s wrong with big business. They see the company in a race to pave the planet and turn it into a giant emporium of cheap goods built on the back of cheap labor. The union-funded website walmartwatch.com dismisses Wal-Mart’s environmental push as a “high-priced green-washing campaign.”

Wal-Mart, though, has a whole lot more to worry about than convincing a few idealogical critics that its eco-intentions are pure. Its business , for starters. Its same sales growth has slowed down, trailing Target’s and Costco’s. Its stock price is another big concern. After rising 1205% during the 1990s, the stock has fallen by 30% since Scott took over as CEO in January 2000.
Wal-Mart’s single-minded desire to save its customers money has been its raison d’etre for 44 years. Which raises two questions : Why is the world’s largest retailer so determined to become the greenest? And how green can a company that operates 6,600 big-boxes stores really get?

The company is the biggest private user of electricity in the U.S.; each of its 2,074 supercenters uses an average of 1.5 million kilowatts annually, enough as a group to power all of Namibia. Wal-Mart has the nation’s second-largest fleet of trucks, and its vehicles travel a billion miles a year. If each customer who visited Wal-Mart in a week bought one long-lasting compact fluorescent (CF) light bulb, the company estimates, that would reduce electric bills by $3 billion, conserve 50 billion tons of coal, and keep one billion incandescent light bulbs out of landfills over the life of the bulb.

If Wal-Mart influenced the behaviour of a fraction of its 1.8 million employees or the 176 million customers that shop there every week, the impact would be huge. And because of the extraordinary clout Wal-Mart wields with its 60,000 suppliers, it could make even more of a difference by influencing their practices.

The timing was fortuitous. Scott had just undertaken a review of Wal-Mart’s legal and PR woes – and it wasn’t a short list. A lawsuit alleging that Wal-Mart discriminated against its female employees had been certified as a federal class action. Opponents blocked new stores in the suburbs of Los Angeles, San Francisco, and Chicago. A study found that Wal-Mart’s average spending on health benefits for its employees was 30% less than the average of its retail peers. The company’s environmental record was nothing to boast about either: It had paid millions of dollars to state and federal regulators for violating air-and water –pollution laws.

For years Wal-Mart simply brushed off such criticism. “We would put up the sandbags and get out the machine guns,” Scott recalls, After all, business was good. They were saving their customers billions, fighting for the little guy. But as the upstart rural retailer grew into one of America’s biggest companies and clashed with unionized competitors, it made powerful enemies. Expectations of business were rising, and Wal-Mart was failing to meet them. A McKinsey &Co. study leaked to the press by walmartwatch.com found that up to 8% of shoppers had stopped patronizing the chain because of its reputation.

Scott wondered, “If we had known ten years ago what we know now, what would we have done differently that might have kept us out of some of these issues or would have enhanced our reputation? It seemed to me that ultimately many of the issues that had to do with the environment were going to wind up with people feeling like we had a greater responsibility than we were, at the time, accepting.”

In a Drab Bentonville Conference Room, Scott, Rob Walton, Seligmann and Glenn Prickett of Conservation International, and a friend of Seligmann’s named Jib Ellison, a river-rafting guide turned management consultant, convened a pivotal meeting in June 2004. For a presentation to the man who is arguably the most powerful CEO in the world and the man who is inarguably one of the richest, the pitch was surprisingly informal.

---------------------------------------------------------
The remaining content in this article is only available to subscribers. If you are not a subscriber you can subscribe online for $15 per year. Click here to find out how to sign up online now

Comments