How Walmart Pushed Its Suppliers To Do Better

An excerpt from a new book on the retailer shows how it began to examine its own carbon footprint, and then asked its suppliers to follow suit.

In 2004, the former CEO of Wal-Mart, H. Lee Scott, and river guide-turned sustainability consultant Jib Ellison, formed an unusual partnership to bring new green business practices to the retail giant. In effect, they turned Wal-Mart into a giant laboratory to test Ellison's assertion that the clean, green, least wasteful way of doing businesses was not a source of added cost and risk, but a path to more profits, and to the greatest untapped business opportunity of the century.

The following excerpt, from Force of Nature: The Unlikely Story of Wal-Mart's Green Revolution, by Pulitzer Prize-winning author Edward Humes, is adapted from a section in which the retailer asks its suppliers large and small to assess their energy and carbon footprint — with surprising results.

Charged with reducing Wal-Mart's carbon footprint, Jim Stanway, the retail giant's energy czar, hit a roadblock two years into Wal-Mart's unlikely green crusade.

Yes, the retailer had made progress with better store lighting, efficient cold cases, and a dramatic lowering of fuel consumption by its fleet of 7,200 big-rig trucks. One change alone to that fleet — installing auxiliary power units so the trucks didn't have to idle day and night — had eliminated 100,000 metric tons of carbon. And saved Wal-Mart $25 million a year at the same time.

The curly-haired British transplant had developed a shorthand mantra to explain this win-win: "Carbon equals energy. Energy equals money. Cutting carbon saves money." If every member of Congress with a dim view of green would just learn that little ditty, as Stanway saw it, the United States would have passed groundbreaking climate legislation long ago and smart businesses already would be cashing in on it.

Wal-Mart is the largest private purchaser of electricity in the United States — its stores consume more power every year than a city of 3 million — and the trucking fleet is the second largest in the nation, so these gains were impressive. Yet Stanway knew they barely put a dent in the Wal-Mart footprint, because more than 90 percent of Wal-Mart's energy use and emissions lay in its supply chain. The real dirt — and the real potential gains — were not in the stores and trucks bearing Wal-Mart's logo, but in the big manufactures and thousands of smaller businesses that supply the goods on the retailer's shelves.

It made perfect sense to go after that part of the footprint, but that's where Stanway's problem came in: How could it be measured? What was the greenhouse footprint of the stuff Wal-Mart sold? What did a pair of blue jeans do to the climate? A bunch of grapes? A pair of lady's stockings? Or an Alaskan salmon fillet twice frozen and shipped to China for processing before landing in a frosty display case in the Newark Wal-Mart? Nobody knew. Nobody could tell him. There was no transparency. And if you couldn't compare, if you couldn't know what a specific product was doing to the climate, you couldn't decide what to buy and what to change.

The solution finally came to Stanway late one night sitting in his kitchen: He'd start small, with just a few simple, everyday items to see if their energy use and carbon footprint could be figured out. He looked around and decided on seven common items: milk, beer, soda, soap, DVDs, toothpaste, and vacuum cleaners. Everyone uses them. Wal-Mart sells them by the truckloads every day, rivers of beer and soda, mountains of soap and toothpaste. He started making calls and, gradually, the information trickled in, with several industries — notably dairy and apparel — motivated to launch major green initiatives of their own. The inquiries then expanded to all products, as suppliers big and small were asked questions that had never been asked before, from Coca-Cola and Twentieth Century Fox to the 500-dairy cow farmer in upstate New York and the family-owned Dana Undies in Early, Georgia. There was much fretting that Wal-Mart was trying to impose its costs on other business while setting itself up as a kind of private-sector EPA, but Wal-Mart responded that it wasn't imposing any burden on anyone. It was simply offering the same opportunity to serve profit and planet that it was pursuing. And they offered to prove it.

When Dana Undies agreed to have a Wal-Mart energy audit to attempt to prove this seemingly dubious proposition, the owners weren't sure what to expect. Wal-Mart recommended the company make the same changes to its plants that the retailer had done in its own stores: plant shade trees, paint the roof white, clean the dusty air conditioner coils and install energy-efficient lighting. Dana decided to go for it. The result: Electric bills at the 65,000-square-foot factory fell by as much as 71 percent. The improvements paid for themselves within a year. Sustainability really was, it seemed, an opportunity instead of a cost.

Who knew that U.S. businesses in this day and age wasted so much energy due to poor lighting and dusty, inefficient machinery? If done nationwide, enough electricity would be saved to avoid building dozens of power plants. Worldwide, that number would grow into the hundreds, perhaps more. Do the same with homes, almost all of which are massively inefficient, and the impact on carbon emissions — not to mention everyone's bottom line — would be off the charts. "What we found out there was staggering," Stanway later recalled. "And that's only the beginning."

[Photo from Walmart's Flickr stream]

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