Wal-Mart execs provide update on the retailer’s 10-year sustainability milestones

by Kim Souza ([email protected]) 195 views 

It’s been a decade-long journey of sustainability for Wal-Mart Stores Inc., and while the retailer has met several of its milestone goals set five and 10 years ago, executives continue to up the ante because CEO Doug McMiilon said it’s good business.

At its annual milestone meeting in Bentonville on Tuesday (Nov. 17), Wal-Mart announced the completion of prior commitments to reduce 20 million metric tons of greenhouse gas (GHG) emissions from its global supply chain and double its fleet efficiency, while it continues to work on other goals.

“We’re proud to recognize the progress we continue to make every day, and we’re excited about what we hope to accomplish in the next ten years and beyond,” McMillon said. “Our company has made major strides since we embarked on this journey, and our focus for the next decade will remain the same: doing the right thing for our customers, our communities, people working in the supply chain and the planet. Our approach to global responsibility not only makes sense for the environment, but it’s also good for our customers, and our business.”

McMillon said when then-CEO Lee Scott boldly stepped out in 2005 with three aspirational goals it was a little scary, but it was exactly what the retailer needed to proceed on this long-term commitment. Wal-Mart’s continuing goals are:
• to be supplied by 100% renewable energy by 2020;
• create zero waste; and
• sell products that sustain people and the environment.

Today 26% of Wal-Mart’s energy use is supplied with renewable sources and the retailer says it is committed to growing that number over the next five years. One area Wal-Mart exceeded its goal was in the elimination of more than 20 million metric tons of Greenhouse Gas (GHG) emission from its global supply chain. The 20 million metric ton goal was set in 2010 and todate the retailer has reduced GHG by 28.2 million metric tons which is the equivalent of taking more than 5.9 million cars off the road for an entire year.

“While our journey is far from over, it’s clear that we are on the right path. Even as Wal-Mart grows, we are continuing to leverage our scale and enhancing our supply chain for the good of people and the planet,” Kathleen McLaughlin, chief sustainability officer for Wal-Mart Stores Inc., said in a statement.

At least two environmental partners saluted Wal-Mart for its achievements. Fred Krupp of the Environmental Defense Fund said the retailer has been a leader and more importantly has gotten its vast supplier base onboard which is the only way to really move the needle. He said Wal-Mart’s goals are bold but achievable, they are publicly announced for accountability, and more importantly they are science-based.

Krupp has challenged the retailer to set practical policies that work for business. He said Wal-Mart has set practical policies that work for the business by finding efficiencies across its transportation segment. 

“This is important and it’s already part of the docket now that the transportation industry moves toward increasing sustainability and efficiency standards,” Krupp said.

Peter Seligmann, chairman of Conservation International, was also present at the Wal-Mart meeting. He said Wal-Mart has democratized the concept of sustainability.

“You have made it affordable and easy to understand for your customers and your suppliers and that is massively important. It’s an extraordinary achievement,” Seligmann told McMillon at the meeting.

Some environmentalists have criticized Wal-Mart for not taking a larger role saying retailer continues to lean on its suppliers to do the heavy lifting.

Don Frieson, executive vice president of operations at Sam’s Club, said during the event that store operations are just 10% of Wal-Mart Stores’ total carbon footprint. The retailer’s massive supply chain is where 90% of the carbon footprint is found.

However, Frieson said Wal-Mart operations did in 2005 begin to do more to reduce waste. Low hanging fruit like recycling at stores was a logical place to start. This has become part of the retailer’s operational DNA. He said food diversion programs also have evolved in helping the retailer eliminate food wastes.

Each year he said the retailer diverts enough foods to provide 1 billion meals, turning what would be waste into meals for the needy. Frieson said since 2012 the company has also donated more than 250,000 truckloads of organic produce to various food ministries. These food diversion programs in the U.S. have eliminated the need for more than 2,000 trash compactors in Walmart stores.

The retailer is already seeing $250 million in annual savings in energy bills, from running 20% more efficiently in its international division. When the retailer achieves its renewable energy goals to produce or procure 7 billion kWh of renewable energy by 2020, Wal-Mart said the combined two goals will produce savings of $1 billion annually to the retailer.

Chris Sultemeier, executive vice president of Walmart Transportation, said the retailer has met its goal to double trucking fleet efficiency by 2015 which was one of the three goals set by Scott in 2005. He said it reached the goal by filling the trailers full, reducing the number of miles driven and using more efficient equipment.

“I thought we ran a pretty efficient fleet in 2005, but through work with our suppliers and internal innovations we have made good progress. As of October, Walmart’s transportation fleet is at 102% of our its goal to double its efficiency,” he said. “This year we will ship about 1 billion more cases than we did in 2005 … If we were still running at the 2005 efficiency levels it would mean driving 465 million miles more than we will actually drive.”

The retailer also discussed its successes in land conservation, sustainable sourcing and healthy food initiatives. Wal-Mart will provide a complete update in its annual sustainability report published after fiscal year-end in the spring of 2016.