Sustainability leader, Wal-Mart fined for hazardous waste

Wal-Mart Stores Inc. has pled guilty to dumping hazardous waste across California between 2003 and 2005 incurring $81 million in fines. As part of the plea, the company will also clean up dump sites in Missouri, according to media reports.

The plea agreements announced Tuesday (May 28) put an end to an investigation involving more than 20 prosecutors and 32 environmental groups over the past eight years.

But it also blackens the retailer’s eye given it has worked so hard to set higher sustainability and global responsibility standards for itself and its extensive supply chain. Last month Wal-Mart released a 174-page report on its exhaustive sustainability efforts from lowering carbon greenhouse emissions to more ethical sourcing of the products it sells around the globe.

The retailer said in a statement following Tuesday’s settlement it remains committed reducing hazardous wastes through a number of initiatives resulting in a 30% reduction since 2010.

Retail sustainability expert Stacy Mitchell said Wal-Mart wants to be seen as a leader for its sustainability efforts, but other retailers like Kohl’s, Staples, and Whole Foods are much further along in the process of being a sustainable company with respect to their overall green power usage. Mitchell is a research analyst at the Institute for Local Self Reliance in Portland, Maine.

The plea entered Tuesday in San Francisco federal court involved misdemeanor counts of negligently dumping pollutants from its stores into sanitation drains across the state, according to Wal-Mart spokeswoman Brooke Buchanan.

"We have fixed the problem," Buchanan said. "We are obviously happy that this is the final resolution."

TRAINING AND GOALS
Court documents indicate Wal-Mart did not properly train its employees on how to handle and dispose hazardous materials at its stores. Buchanan said employees are better trained on how clean up, transport and dispose of dangerous products such as fertilizer that are spilled in the store or present with damaged packaging. She said workers are trained on how to handle hazardous packages and they have scanners that tell them whether a damaged package contains toxic material.

In 2010, the company agreed to pay $27.6 million to settle similar allegations made by California authorities that led to the overhaul of its hazardous waste compliance program nationwide.

Wal-Mart CEO Mike Duke notes in the recently published global responsibility report the retailer has three main goals it continues to pursue as a leader:
1) To be supplied 100% by renewable energy;
2) To create zero waste; and
3) To sell products that sustain people and the environment.

The retailer also says it’s focused on transparency between itself and its suppliers about the efforts under way. But the 174-page report released by Wal-mart did not mention the pending charges on illegal dumping. Wal-Mart did say in the report it would hold its suppliers to stricter standards as it began auditing factories in China in 2008 for environmental criteria such as air emissions, wastewater discharges and management of toxic substances and hazardous waste disposal.

This year, Wal-Mart also began using The Sustainability Index to influence which products get on the shelf. Buyers will be required to set specific sustainability objectives that will tied to their annual reviews.

The Environmental Defense Fund is on the ground in Bentonville to assess supplier reactions to this new criteria. Alisha Staggs, a project manager at the EDF in Bentonville,  recently wrote in a blog that the retail giant’s sustainability index requirements were an ambitious goal, noting that there would likely be some who “think Wal-Mart is taking this too far.”

By the end of 2017, Walmart will buy 70% of the goods it sells in U.S. stores and U.S. Sam’s Clubs from suppliers who use The Sustainability Index to evaluate and share the sustainability of products.

For example cereal makers like Kellogg's, Post, and General Mills will be compared against each other based on their sustainability score, and buyers who make the decisions about what gets on the shelf will have a financial incentive to go with the most sustainable products. Consumers will also see best- and worst-in-class ratings as well.

Staggs notes the EDF is onboard with Wal-Mart’s sustainability index goals saying this can push hard to achieve the kinds of transformational change needed.

“With over 100,000 suppliers, Wal-Mart has the ability to use the Sustainability Index to move entire industries to go beyond what is required by law, benefiting consumers, workers and the planet,” Staggs notes.

Mitchell said Wal-Mart pivoted to the supplier emphasis in the last year while other goals once stated where abandoned. Mitchell said Wal-Mart does a great job picking certain areas to focus on, but turns a blind eye to other issues like responsible land use as it continues to build sprawling, single-story structures five miles within its other stores.

She gives Wal-Mart a lot of credit for generating media attention around the solar panels in its California and Arizona stores, but she said solar power is about the cheapest source of electricity in these markets today.

“Wal-Mart takes a lot of credit for what they see as sustainable,” Mitchell said.

She adds there is still lots of room for improvement in Wal-Mart’s sustainability goals but it may be easier and cheaper for the retailer to shift more focus on the supply chain for which they can take also credit.