by Nadav Malin & Jessica Boehland
“We should view the environment as [Hurricane] Katrina in slow motion.” With that statement, Wal-Mart Stores, Inc., CEO Lee Scott summarized his newfound understanding of ecological connections, following a year of listening to Wal-Mart’s critics. In his October 2005 speech, Scott signaled what appears to be a remarkable culture shift for a retail giant famous for driving its suppliers to streamline operations and reduce their costs. Can an interest in the total cost of goods and services (including environmental and social impacts) coexist with a mission to deliver products at the lowest possible cost? A multibillion-dollar experiment now appears to be underway to find out.
The scale at which Wal-Mart operates is staggering. The company took in roughly $300 billion in sales in 2005 as the largest company in the world, according to Fortune magazine. It has a staff of 1.6 million people at 3,700 U.S. facilities and has 2,400 facilities elsewhere in the Americas and in Japan, South Korea and the UK. Its indoor retail space in the U.S. alone totals nearly 600 million square feet. It reports that more than 138 million people visit a Wal-Mart in any given week, and according to a December 2005 poll by the Pew Research Center, 84% of Americans shopped there in the past year.
This enormous company has plenty of critics, and from a local economy, small-is-beautiful- perspective there is plenty to dislike about a retailer that seems bent on driving down costs above all else. But when an organization this large pushes for environmental action, through its own practices and the demands it makes on its suppliers, the impacts can be enormous. In the buildings sector alone, Wal-Mart’s research and purchasing can jumpstart new technologies that might otherwise languish. This article unpacks Wal-Mart’s recent environmental initiative.
The environmental initiative was launched in 2003 as an exploratory venture into an area in which Wal-Mart executives wanted to be proactive, according to Dave Sherman of Blu Skye Sustainability Consulting, who has helped coordinate much of the company’s work in the area. “They were being criticized socially,” explains Sherman, “while in the environmental realm felt they might be open to criticism, but they just didn’t know.” After some initial research and background work by Conservation International, Scott “decided this is an area worth learning more about,” says Sherman. Wal-Mart identified a number of key topic areas and spent a lot of time listening to critics and experts, according to the company. From those contacts and a high level, two-day, off-site retreat came the decision to focus on three main areas. They said: “Let’s understand our products, energy efficiency and waste,” reports Sherman.
Product Sourcing
Wal-Mart and its consultants are now analyzing the impacts associated with everything the company sells, seeking opportunities to reduce those impacts. Wal-Mart has discovered a consumer interest in organic cotton garments, for example, so it has begun carrying a few organic items. In the process of pursuing these options with suppliers, Wal-Mart executives determined that 100% organic cotton may not be feasible for the majority of its products, but that cotton could be grown in a more responsible way, so the company is developing an alternative standard for environmentally preferable cotton.
Another example of efforts to improve its supply chain is the November 17, 2005 announcement that all imported shrimp sold in Wal-Mart stores will be independently certified by Aquaculture Certification Council, Inc., for adherence to its Best Aquaculture Practices standard. Wal-Mart helped the Global Aquaculture Alliance develop this standard, with support from technical experts and NGOs, including Conservation International. A primary goal is to conserve and restore coastal mangrove ecosystems that have been harmed by shrimp farming.
Looking at impacts from the use of its products, Wal-Mart noted that fewer than 10% of the light bulbs it sells are compact fluorescents, which his line with the national average. “An increase in a technology like that has huge implications for climate,” notes Andy Ruben, Wal-Mart’s director of sustainability and the environment. “That’s at the top of our list,” Ruben adds. Wal-Mart is also seeking to drive improvements in areas such as “phantom loads” created by electronic items that draw power even when they are turned off. “A lot of products can be made better, in ways that a customer never sees,” says Rubin.
Packaging and Waste
Wal-Mart has a stated goal of reducing the amount of packaging used for products it carries, increasing the use of recycled content in packaging, and eliminating PVC packaging from its private brands by the end of 2007. In November, 2005, the company announced that Sam’s Club stores would begin using containers using polylactic acid (PLA), a compostable, corn-based polymer produced by NatureWorks, LLC. The stores started with packaging for cut fruit, strawberries, herbs and brussel sprouts, which together account for over 100 million containers a year.
Wal-Mart has set an aggressive goal of reducing its solid waste generation 25% by the end of 2008. Ultimately, the company hopes to eliminate its waste stream entirely, though it has yet to set a date for that goal. As a first step, Wal-Mart, working with Rocky Mountain Recycling, began a pilot program in 2004 to recycle plastic such as shrink wrap, plastic bags, apparel bags. The program has been expanded to 600 stores in 17 states and plans to go nationwide this year.
Trucks
With about 7,100 tractors and 44,500 trailers, Wal-Mart operates one of the largest private trucking fleets in the country. In 2004, Wal-Mart signed onto the U.S. EPA’s voluntary SmartWay Transport Partnership, which helps companies reduce pollution from diesel engines by, for example: setting emission standards; reducing the level of sulphur in fuel; encouraging better efficiency through the use of automatic tire-inflation systems and low-viscosity lubricants; and reducing idling. In October, 2005, the company announced a goal of improving efficiency of its fleet 25% by the end of 2008 and doubling its efficiency within 10 years, saving $310 million each year in fuel costs by 2015. This increase will come partly from an increase in gas mileage from its current 6.5 miles per gallon and partly from changes to how the trucks are loaded and dispatched.
Buildings
Wal-Mart has estimated its direct greenhouse emissions to be equivalent to about 16.8 million metric tons of CO2 per year – primarily for electricity at its facilities but also for heating and transportation fuels. This represents about 0.2% of total U.S. emissions.
Wal-Mart has been exploring options for improving the environmental performance of its buildings for more than a decade. In 1993, Wal-Mart opened its first demonstration store, in Lawrence, Kansas. The intent of the store was to focus on building materials; it used FSC-certified wood as the main structural material, with the idea that the wood would someday be re-used. The store also features energy-efficient materials and strategies. Its second demonstration store, in Moore, Oklahoma, was designed for energy efficiency, and the third store, in City of Industry, California, incorporates the most successful features of the Lawrence and Moore stores.
Over the years, Wal-Mart has steadily incorporated strategies from these early demonstrations into its prototype
designs, which are the templates from which most Wal-Mart stores are designed and built. In terms of energy, the company identifies lighting, heating, cooling and refrigeration (in stores that sell food) as the biggest loads and has focused on reducing them. Skylights, for example, are now standard in all Supercenters and Sam’s Club stores and in some regular Wal-Mart stores. The ability to dim lights when daylight is available has driven Wal-Mart away from high-intensity discharge (HID) lighting – it now uses fluorescents exclusively.
Other measures that Wal-Mart tested in the demonstration stores and since rolled out widely include sensor-activated faucets, toilets, urinals, and hand dryers, and various measures to increase the efficiency of mechanical systems. In terms of the building envelope, the only significant changes have been on the roof. Light-colored, reflective roofs are now standard for new stores.
As part of its recent environmental initiative, Wal-Mart has committed to developing, within four years, a prototype store that reduces energy use by 25% and reduces greenhouse gas emissions by at least 30%, compared to today’s stores. Two recently opened superstores will serve as testbeds for a range of environmental products and systems – in McKinney, Texas and Aurora, Colorado.
Wal-Mart also plans to share what it learns with the retail and development industries. The Oak Ridge National Lab designed and installed data collection systems in the McKinney test store and a conventional Wal-Mart store; NREL did the same in Aurora, CO. The labs will monitor and compare the buildings’ performance over three years and share the results with Wal-Mart and the general public.
Wal-Mart is experimenting with a green roof on a Chicago store, where vegetated roofs are required. One half will be vegetated, the other will be conventional – air and water quality, amount of runoff and thermal conditions will be analyzed.
Sprawl Mart?
One of Wal-Mart’s biggest drawbacks in the eyes of many environmentalists is its proclivity for participating in, if not promoting, sprawl. The huge footprint of the stores is not easily accommodated in or near town centers, almost assuring that all customer and supply traffic takes place in motor vehicles. “Once these stores are built they draw other development to them, which exacerbates the push of sprawl ever outward, bringing the problems of pavement to new watersheds, and fragmentation of wildlife habitat,” notes Kaid Benfield, director of the Smart Growth and Transportation Program at the Natural Resources Defense Council (NRDC). Perhaps because its sprawl development model is too central to company strategy, the company has thus far ignored development patterns in its environmental program.
Thriving downtown shopping districts might have little to fear, but the appearance of a Wal-Mart nearby can easily turn those in marginal economic health into ghost towns. Aside from cultural and social impacts of the loss of downtowns, forcing people to drive to run errands carries an obvious environmental footprint. Wal-Mart claims that by consolidating so many services in one establishment, it actually reduces driving.
A handful of Wal-Mart stores have been custom-designed to fit into existing buildings or downtown locations, but these are seen as concessions to the community rather than environmentally preferable choices the company might seek on its own. In the Baldwin Hills neighborhood of Los Angeles and in downtown Chicago, for example, Wal-Mart is opening multi-story stores to reach urban populations that can’t easily get to its suburban stores. One obstacle to inner-city Wal-Marts appears to be opposition from labor unions, which tend to have more power in large cities. That opposition is unlikely to change given Wal-Mart’s firm anti-union stance.
Most recently, representatives from the Congress for a New Urbanism (CNU) engaged Wal-Mart executives in dialog about their land-use practices. “We told him [Wal-Mart’s director of real estate and design] that although they are incorporating some green elements into their buildings, the location and urban form require customers to drive, thereby negating any true environmental benefits,” said Laura Hall, of Fisher & Hall Urban Design.
The New Urbanists have since been invited to Wal-Mart’s Arkansas headquarters to share their ideas for mixed-use, pedestrian Wal-Marts. They’ve proposed two versions – a town-center store and an edge-of-town complex – both include housing and other urgently needed spaces tightly integrated into the retail development.
Wal-Mart also has an answer to the huge amount of land it occupies – 88,000 acres and growing by 5000 acres a year, much of which is paved. The company recently pledged $35 million over ten years to conserve at least one acre of wildlife habitat for each acre it currently occupies in the U.S. as well as the land it anticipates developing over the next 10 years – 138,000 acres in all – as a pioneer participant in the National Fish and Wildlife Foundation program, Acres for America. “The inspiration behind the program is to reach out to the retail community and challenge them to look at their land use, their footprint, and how they could protect an equal amount of land,” says Jennifer Lewin, assistant director of development.
Wal-Mart has no influence over how Acres distributes the money, and all grants are peer-reviewed before they are awarded. “Decisions are made based on science,” stresses Lewin, adding that the program targets acquisitions and easements that counter fragmentation of important wildlife habitat. In April 2005, the Foundation announced that $8.8 million of Wal-Mart’s donation had been used to permanently protect 321,000 acres of priority habitat in Louisiana, Arkansas, Arizona, Oregon and Maine – exceeding Wal-Mart’s 138,000 goal with just the first round of grants.
NRDC’s Benfield says, “It doesn’t solve any of the sprawl-related problems. It’s a gesture but it doesn’t change their practices.”
Abandoned Stores
Wal-Mart’s critics often charge the company with abandoning its stores after a few years, leaving communities with big, empty boxes, acres of unused parking lot and no tax revenues for the land. Wal-Mart doesn’t deny that it frequently outgrows its stores and relocates. The company claims it is proactive in finding productive uses for the property – its real estate website lists over 300 buildings for sale and claims it sold or leased over 500 million square feet of building space.
Some towns have begun demanding big box retailers post a bond when they build a new store to cover the cost of demolition, or commit to provisions that prevent them from holding onto an empty, unused property.
Stormwater Pollution
Along with its attachment to the large footprint of its buildings and parking lots, Wal-Mart seems disinclined to recognize the severity of its stormwater impacts. The company has been accused of indifference to evidence that pesticides and fertilizers are escaping into waterways from gardening products stored unprotected in parking lots. Wal-Mart’s response is to highlight its aggressive program for controlling stormwater from its construction sites, but even those measures were instituted only under duress.
Hit in June 2001 with a nationwide consent decree from the US EPA for Clean Water Act violations, followed by a record $3.1 million fine in May 2004, the company implemented a comprehensive training and certification program for the contractors who build its stores.
Final Thoughts
Hard data on the company’s impacts and progress in reducing them is not yet available. In part this is because Wal-Mart is just at the be
ginning of a long and complicated undertaking, and the numbers aren’t easy to compile. Wal-Mart can now tell how much cardboard it recycles but can’t tell us what fraction of its overall cardboard waste stream that represents.
The debate about Wal-Mart’s effect on the country and the planet as a whole reflects, in many ways, a cultural divide in the U.S. For much of Middle America, Wal-Mart is innocuous at worst and generally welcomed as a source of low-cost necessities and luxuries. Left-leaning social and environmental activists, on the other hand, see in Wal-Mart the epitome of all that is wrong with our economic and social systems: globalization, union busting, suburban sprawl, and the mass-merchandizing of low-cost, disposable goods.
All parties agree, however, that Wal-Mart operates at such an enormous scale that whatever it does is likely to have far-reaching effects. Considering the indirect impacts of the retailer on its customers, supply chain, and even competitors, no other entity may have as much potential to reduce resource use and emissions.
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Excerpted FROM Environmental Building News, a SustainableBusiness.com Content Partner.
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