Wal-Mart: Sustainability Starts with Small Steps
When a Wal-Mart store manager
in North Carolina sent an e-mail to corporate wondering why the lights on
vending machines were lit even though all employees knew the machine was
on, Wal-Mart officials decided to unplug the lights behind the panels in
all its break rooms across its U.S. stores. The result, among other benefits,
was a cost saving of $1.4 million in energy costs.
At a session Monday at the
NRF convention, “Sustainability in Retail – Increasing Profitability and
Impacting the World,” Matt Kistler, senior vice president of sustainability
for Wal-Mart, used that as an example of the importance for companies to just “get
started” in looking for ways to improve sustainability.
“Small things do add up and
you need to have some momentum to get to the big things,” said Mr. Kistler.
As another example, he noted
how a number of years ago the retailer set a long-term goal to double the
efficiency of its fleet of trucks. While Wal-Mart was supposed
to improve its fleet efficiency by 25 percent under the plan, it has in fact
improved by 38 percent through a mix of low-tech and high-tech solutions. This
included reducing the size of the gas tank to make the trucks lighter, as well
as putting side skirts on the trucks to make them more aerodynamic. Higher-tech
solutions included working on new technologies such as using auxiliary power
units to allow drivers to turn off the trucks while idling. It also recently
came out with its first hybrid-fuel truck.
But Mr. Kistler also noted
that only eight percent of Wal-Mart’s efforts to improve sustainability was
within its control; a whopping 92 percent had to come from improvements across
the supply chain. Toward that end, Wal-Mart is working with a number of different
suppliers to “truly drive innovation” throughout the supply chain. He noted
that many of these efforts have side benefits for consumers. For instance,
while Wal-Mart recently worked with suppliers to achieve its goal of improving
the efficiency on flat panel TVs by 30 percent, the consumer also “would
wind up with more in her pocket” through reduced energy consumption.
The company is also working
to build a sustainability index that fully scores products based on their
life cycle. As part of that effort, it’s asking suppliers to answer 15 basic
questions around energy, natural resources, material efficiency, and the social
impact/social component of sustainability. Since all the data and research
is “not as clear as many of us would like it to be,” said Kistler, Wal-Mart
is working with universities to provide an open-sourced database to share
the information it receives and analyzes with the retail community “so we
can make the right decisions on how we apply sustainability to our business.”
The most “ambitious” goal
is to have a consumer-facing element that will enable consumers to start
evaluating products based on their footprint. Mr. Kistler pointed to this
as potentially engaging the consumer in affecting the sustainability movement.
Internally, he noted how
Wal-Mart’s own efforts to encourage associates to commit to personal sustainable
programs, such as quitting smoking or exercising more, is paying dividends
when they come up with ideas that drive company-wide sustainability efforts.
“Obviously, the more our associates
are engaged and aware and looking for opportunities, that can have not only
a tremendous impact on the environment but also for our business,” said Mr.
Questions: Are current cost savings enough for the retail industry to drive
sustainability efforts? In what areas of the business do you see the greatest
opportunities for retailers to benefit from sustainability efforts? What’s
the likelihood that consumers will ultimately drive efforts toward sustainability?