By Alex Goldschmidt •
March 31, 2008
Wal-Mart’s environmental initiatives have been a major part of the company’s recent attempts to win public favor. The company has made a number of lofty promises aimed at improving its carbon footprint AND its public image. CEO Lee Scott has announced plans to reduce packaging, improve its truck fleet and “green up” the company’s stores. Up until now, the public has bought it.
But an article in today’s Northwest Arkansas Morning News shows that the company’s suppliers [...]
Warning: long(ish) post ahead…
It’s been almost two weeks since I traveled to Kansas City for Wal-Mart’s Year-Beginning Meeting, so that’s probably more than enough time to think about the broad implications of CEO Lee Scott’s “Company of the Future” speech, and the plans outlined for energy efficiency and supply chain sustainability. In that time, I’ve also thought about Enterprise Rent-a-Car’s green initiatives, and Joel Makower and Greener World Media’s State of Green Business 2008 report (and I’ll be writing more about both). I’ve also spent some time at Wal-Mart Watch’s site, and read through some of the sustainability-related criticism that organization has offered.
Each meeting I’ve had with people at Wal-Mart has challenged me: there’s still that activist in me that wants to shout about past and current issues, and he competes with a more pragmatic business thinker who wants to praise the company (and others) for seeing a business case for sustainability. I think we need both voices to be a part of the mix: not just mine, of course, but many activists and business thinkers contributing to the conversation. To add my two cents, I’ll focus on some of the issues raised by the company.
Energy Efficiency: I’m pretty sure it’s universally accepted, even by critics, that Wal-Mart’s moves towards more energy-efficient stores are positive steps. This is also a prime example of good business thinking on sustainability: energy efficiency contributes to a healthier bottom line while also producing lower levels of emissions. Where I get tangled up, though, is the combination of these efforts with the company’s growth plans.
As I noted in Thursday’s post, Wal-Mart CEO Lee Scott’s “Company of the Future” speech to executives and store managers contained some intriguing visions for moves that Wal-Mart could make on helping its customers conserve energy. As I expected, several commenters expressed concern about other areas, particularly product sourcing. Conventional business thinking has heralded the efficiency of the company’s supply chain; activists, on the other hand, have noted that Wal-Mart (along with most major retailers) has benefited from more open global trade policies that, generally, have placed little or no emphasis on workers’ rights, occupational safety, or environmental impact.
Numerous companies have taken a beating for problems with factory conditions in the developing world, while the retail sector in general has had to face both PR and legal nightmares related to the movement of American operations to “cheaper foreign markets” (yeah, I’m paraphrasing Lou Dobbs here). Combine that with recent revelations that some goods from Chinese factories have been tainted with everything from lead to antifreeze, one might wonder why more multinationals aren’t racing back to the US and other more regulated markets. But that’s a different post…
Suppliers
Supply chain issues took up roughly a third of Scott’s speech last week, and, again, the CEO presented some bold concepts for how Wal-Mart might address problems raised by sourcing products from the developing world. The first concerned the company’s relationships with its suppliers:
