Wal-mart to Reduce Its Environmental Footprint
(Photo courtesy of ICE.gov)
Wal-mart has come out with a new environmental policy that could have sweeping changes and take away some negative attention the world's largest retailer has been getting for what critics have called limited health care, scant benefits, and poor treatment of workers. Host Steve Curwood talks with Andy Ruben, the VP of Corporate Strategy and Sustainability at Wal-mart.
CURWOOD: From the Jennifer and Ted Stanley Studios in Somerville, Massachusetts, this is Living on Earth. I'm Steve Curwood.
Wal-Mart is now almost beyond analogy. Elephant? Octopus? Too small, these animals dominate only one realm. Wal-Mart is the largest company that has ever existed on Earth. One out of every three Americans--that’s 100 million people--visit Wal-Mart each week. Twenty-one thousand other companies supply Wal-Mart with everything from pajamas to peanuts and plywood. And it’s the nation's largest seller of records, toys, furniture and jewelry. Its workforce is larger than GM, Ford, GE, and IBM combined.
Its enormous leverage makes and breaks suppliers; a small change sends ripples through the economy… or, maybe, the environment. The company has announced a new environmental policy to reduce energy use in stores, minimize its use of packaging, sell organic cotton clothing at their, quote, “everyday low price.” And, perhaps, more important, it says it is expecting its suppliers around the world to follow suit.
Joining me from Wal-Mart headquarters in Bentonville, Arkansas, is Andy Ruben. He's Vice President of Corporate Strategy and Sustainability there. Hello, sir.
CURWOOD: So, in sum, what’s Wal-Mart’s new environmental policy?
RUBEN: You know, if I had to make it concise, we found that environment, looking at these things, it’s good for business. Looking at things in a new way can help us in terms of reducing energy where we pay for the pollution that goes on in some way, and our customers do. Reducing waste, then we pay twice for. And looking at products where, essentially, we are focused on democratizing, bringing to a mass market, products that are healthy and safe for our customers and produced in a way that’s good for future generations.
CURWOOD: Wal-Mart is the biggest buyer on the planet, or close to it, anyway. So how big do you think the environmental impact of your changes is going to be?
RUBEN: One thing about being large that is really exciting is there’s some things that we’re just uniquely positioned for. I’ll give you a few examples. Transitioning our private brand products: all the plastic, the PVC that sits in like the packaging windows or covers up produce, transitioning that from a PVC or oil-based product to a corn-based product or a bio-based product.
And it sounds like a small change, but what’s interesting about our market position is as we set that goal out there and work toward it, there’s a small market that already existed for that type of transition. And as we’re setting the goal out there we’re seeing the market move that way as well.
You know, time will tell, but we just see huge opportunity. I mean, we know already that we do have a large footprint. In the past, I think we’ve looked at that really as a liability. In the shift that we’re starting to make, and it’s exciting, is that those things that have been challenges in the past potentially become gateways. There’re things that really we can create huge benefit from.
CURWOOD: Walk me through how Wal-Mart believes it can sell organically grown cotton clothing for very close to, if not the same price as, conventionally grown cotton clothing.
RUBEN: There are so many opportunities for a product. You know, some of them come from all the way back at the field where we might have only bought cotton, let’s say, from farmers who have a field year-round. So understanding, you know, what happens with that field when it’s not growing cotton, being able to grow produce and being able to sell that produce through our European operations. That gives farmers extra stability in terms of their buyer, allows them to invest equipment that again brings down the cost of the cotton. And those kinds of opportunities, again, have been there all along. We just hadn’t – I don’t think we had looked at it in this way.
CURWOOD: Tell me, Andy, what are some of the biggest challenges you foresee now in implementing this new environmental policy?
RUBEN: You know, the biggest challenge that we’ve seen all the way through it has been mindset. And what I’m talking about is, many of the opportunities that we’re talking about have existed for some time. It’s just the ability to see them, and it’s looking at things in a different way. And the way we’re approaching this is not a separate part of the organization that works on environment; we see it as consistent with our business and a part of the business.
So, let me give you an example. One brand of toys we sell, a private brand, Kid Connection. Just by reducing the packaging size, we’re able to save $2.4 million in that one product line annually in transportation. It equates to about 3,100 trees that are never harvested and about a thousand barrels oil. Some people are going to be motivated purely by the benefits, some people will be motivated by the cost savings. And I think that’s okay. I think what’s important is that, you know, we take advantage of the opportunities of the company we have.
CURWOOD: I want to ask you about the quote from your CEO, Lee Scott, who said there’s not the ability to change as much in many of those areas like wages and health benefits as we can change in this area of environmental sustainability. And the question is, why not?
RUBEN: Well, I think it’s an area of continual learning. So we’ve spent the past 12 months really focused in the area of environment. And we’re making good progress in those other areas, but really understanding what we’ve done in the past 12 months with environment, we continue to find new opportunities in other areas. And the hope is as we go forward, we continue to look for opportunities to do more in an overall sense, environment and social.
CURWOOD: There’s a certain subset of environmental activists who don’t much like Wal-Mart, and have fought your company in terms of putting up stores in communities and such. What kind of response are you getting from those environmental critics of Wal-Mart to these new lines that you are introducing?
RUBEN: I think it really depends on the critic. And what we have found is there are a lot of our critics out there who simply want Wal-Mart to be a better company. It’s not that they are interested in not having Wal-Mart. And that type of criticism’s actually very productive, and we’ve gotten a lot of help from those people over the past year in terms of understanding, you know, the things they know a lot more about than we do. And with working with them we found great innovative solutions to things that we hadn’t uncovered before. In fact, it’s been a source of value.
Now, the critics that just aren’t interested in having Wal-Mart are more difficult to work with because it turns into somewhat of a zero-sum game. But there are a lot of people who just want Wal-Mart to simply be a better company, and that’s the same thing we’re interested in.
CURWOOD: Andy Ruben is Vice President of Corporate Strategy and Sustainability for Wal-Mart. Thank you, sir.
RUBEN: Thank you.
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