Walmart aspires to be jolly green giant

The Sunday Times
April 19, 2009
The planet’s biggest retailer has set tough targets to eliminate all waste from its stores
Dominic Rushe

A group from Walmart, the world’s most powerful retailer, gathered round a cardboard box last Wednesday at the fourth annual Sustainable Packaging Exposition in Rogers, Arkansas. They were getting very excited. The box, made by Interstate Container, a small American packaging firm, held some ice and a single Diet Coke. The boxes stay waterproof for two weeks, are biodegradable and made of recycled cardboard. Pete Bugas, national account manager, had hoped to pitch them as a way to ship fish or other wet items. The Walmart executives had other ideas.
The biggest retailer on the planet plans to become the greenest. By 2025 it wants to eliminate all waste by reducing, recycling or reusing everything that comes into its 4,100 American stores. For Asda, its British operation, the target is 2010. It’s a tough target and a compostable cardboard box might get them some way there.
Vonda Lockwood, strategy manager for Walmart’s sustainability and operations unit, still has a lot of questions for Bugas but if the whole box works as described, Walmart could send its compostable goods off to rot in boxes that would also turn into mulch instead of having to be returned to stores and cleaned for the next load. For a company this size that’s a lot of time and money saved. For Walmart, sustainability isn’t just about saving the planet, it’s about the bottom line.
“If I can find one nugget like this at the expo that changes things for us, that’s a huge win,” said Lockwood. “If that box works out, it would pay for itself in labour alone.”

Vendors at the expo are lining up to solve Walmart’s problems. There are plastic utensils made out of biodegradable corn, super-tough cardboard to replace those plastic clam cases that house electronic goods before they end up in landfill, and pallets made of cardboard.
The expo is fast becoming a mecca for green ideas and Walmart is attracting praise in some corners of the eco-aware community where once it attracted nothing but ire.
Last year Walmart recycled 180m pounds of paper, plastic, aluminium and other rubbish that once ended up in landfill, and 2.5m tonnes of cardboard. It is now turning its waste plastic into resin and making it into clothes hangers and stepping stones for gardens. Plastic bottles are being shredded into fluff used to stuff dog beds. Walmart even has 15 trucks running on fuel made from the grease from its chicken roasters.
“We are looking at everything we have and asking where it goes,” said Mike Hagood, senior director of Walmart’s Sustainable Value Networks. It’s a big change for a company that until recently was held up as an example of all that was wrong about retail’s impact on the environment. And nobody knows that more than the insiders.
“When I agreed to take this job, I had no environmental background. I’m a store operator,” said Hagood. He said he was using polystyrene plates at home to save on washing up then just throwing them away. “I went home and told my wife ‘we are going to have to change some things’. It’s been hugely gratifying.”
Lee Scott, Walmart’s recently retired chief executive, kicked off the green initiative in 2005, charging the firm with making every part of its business greener. Charles Zimmerman, vice president of international design and construction, has since overseen a rethink on virtually every part of the company’s stores. Walmart’s stores have exposed concrete floors – a material whose manufacture generates a huge amount of greenhouse gases. Those floors now contain 20% fly ash, recycled from the chimneys of coal-fired power plants, and are cast in forms made from soya beans instead of petroleum based plastics.
All Walmart’s roofs are now white to reflect heat – cooling a store is more expensive than heating one. And when Walmart can’t manufacture its own solutions it has pressed its suppliers to do so.
After Zimmerman pressed his air conditioning suppliers to cut the energy their machines use, Lennox came back with a machine that exceeded Department of Energy standards by 60%. It now has the contract for all Walmart stores – 1,000 units a year.
Since the contract was signed, Lennox’s competitors have come up with machines to compete and Walmart’s rivals are also buying the new energy-efficient units.
“We basically changed the industry because of our scale,” said Zimmerman. He is now bringing Walmart’s weight to bear on LED lighting. LED lights are vastly more efficient and longer lasting than conventional lights, but they are also 10 times more expensive.
Zimmerman hopes that Walmart’s weight can bring those prices down and he is sure the cost even now is worth the savings the firm will make in time and money replacing old bulbs. “Energy is our No 2 operating expense. If we can reduce that cost by 25%-30%, that’s huge. We could never do that in labour. It’s a win-win for us,” said Zimmerman.
Not everyone is impressed. Fundamentally Walmart and its big retail rivals can never be green businesses, said Eric Bull of Walmart Watch, a watchdog group. “Walmart’s customers drive to these huge stores to buy goods that have been shipped from China in leaky ships – it’s not a green business,” said Bull.
He said it was clear Walmart had identified sustainability as an issue that was a boost for the company on the PR front and on its own costs but it was suppliers who would pick up the bill. “I’m not saying what they are doing isn’t good, but we should be clear about exactly what Walmart does get the credit for,” he said.
For Zimmerman, the critics are missing the point. Most of Walmart’s customers will never notice his sustainable initiatives.
“Really, I don’t care about the PR. It’s about the bottom line,” he said. Not that Walmart would mind if it does manage to take the wind out of some critics’ sails along the way. “I can’t tell you the feeling I get when I silence some of our critics,” said Hagood.