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This is
certainly good news, hopeful that the ‘Godzilla of retail’ may be learning to
be a good neighbor. It’s also a smart move with rising energy costs and
marketing to new ‘green’ customers. We will be watching. kwc Wal-Mart to Seek
Savings in Energy
By MICHAEL BARBARO and FELICITY BARRINGER, Oct. 24, 2005 BENTONVILLE, Ark. - Wal-Mart's chief executive is set to
announce on Tuesday a set of sweeping, specific environmental goals to reduce energy use in its stores, double
its trucks' fuel efficiency, minimize its use of packaging and pressure
thousands of companies in its worldwide supply chain to follow its lead. Embracing energy-conscious and environmentally conscious
goals will help
both the company's bottom line and its customers' needs, H. Lee Scott said in an interview
Monday. Mr. Scott's announcement signals that the nation's largest retailer is joining
the nation's largest manufacturer, General Electric, in pursuing policies that set specific goals for environmental
performance,
while advertising those goals to shareholders and customers and the public as
strategic business decisions. G.E. faced criticism for its own environmental practices;
Wal-Mart has faced criticism as well, but largely over its low wages, scant
health insurance coverage and what its critics have called poor treatment of
workers. Those critics responded to Wal-Mart's environmental initiative by
saying that, while admirable, it is intended to divert attention from the
chain's image problems. Mr. Scott told Wal-Mart's top officers here this morning, in
an address broadcast to employees by video conference, that, "As one of
the largest companies in the world, with an expanding global presence,
environmental problems are our problems." His goals, he said, are to invest $500 million in
technologies that will reduce greenhouse gases from stores and distribution
centers by 20 percent over the next seven years; increase the fuel efficiency
of the truck fleet by 25 percent over the next three years and double it within
10 years, and design a new store within four years that is at least 25 percent
more energy-efficient. News of the upcoming announcement drew carefully parsed
praise from leaders of environmental groups, including some, like Environmental
Defense, which have a history of joint initiatives with large businesses, and
others, like the Sierra Club, which have traditionally been more
confrontational. In general, they applauded Wal-Mart's initiatives and
commitments, but sought assurances that there would be a continuing public
accounting - using a concrete baseline - of factors like energy use,
fuel-efficiency and reduction in solid waste. "I thought G.E. was big," said Alyson Slater, a
spokeswoman for the Global Reporting Initiative, a group based in Amsterdam
that provides guidance to companies seeking to analyze and publicly report
their environmental practices. "But Wal-Mart? Whoa. That's big." "There are a lot of people out there who are going to
be skeptical," she added. "But if they can prove it, if they can say:
Here's our targets. Here's how we're meeting them," then the company could
win over many skeptics, she said. Wal-Mart's community activist and organized labor critics
said the environmental goals failed to address what they said were the
company's most pressing problems.
"It is a diversionary tactic,"
said Chris Kofinis, of Wake Up Wal-Mart, a group founded by the United Food and
Commercial Workers Union, which is trying to organize the chain's workers.
"Wal-Mart understands
that they have a growing public relations disaster on their hands. American people are looking at a company
with $10 billion in profit and $285 billion in sales that makes excuse after
excuse about why it can't provide a living wage and health care to its
workers." In his speech, Mr. Scott outlined a new health insurance
plan with lower premiums but relatively high out-of-pocket deductible
requirements that he said would make benefits more affordable to the company's
1.3 million United States workers. But Ron Pollack, executive director of
Families U.S.A., a health care consumer advocacy group, criticized the plan,
saying employees who signed up for it would be deterred from seeking medical
care because of the out-of-pocket costs, which might exceed $2,500 a year. Mr. Scott struck a defiant note on Wal-Mart's wages, which
average less than $10 an hour, or less than $19,000 a year. "Even slight
overall adjustments to wages eliminate our thin profit margin," he
said. In an unusual move, Mr. Scott asked Congress
to consider raising the minimum wage. "We can see first hand at Wal-Mart how
many of our customers are struggling to get by," he said. The company's environmental initiative includes improving
energy efficiency at its 1,876 supercenters, which now consume an average of 1.5
million kilowatts of electricity annually, according to Tara Stewart, a
spokeswoman for the company. A model center in McKinney, Tex., has in its first
few months shown an improvement of slightly less than 10 percent, she said. Mr. Scott said that as the largest buyer of manufactured
goods in the world, Wal-Mart has the power to encourage its more than 60,000
suppliers to adopt environmentally conscious business practices. "Our
most direct impact will be on our suppliers," he said. "If we request that
our suppliers use
packaging that has less waste or materials that can be recycled, everybody who buys from that
manufacturer will end up using that package." As an example of how the company can encourage better
packaging, Mr. Scott said he would ensure prime placement, at the end of store
aisles, for a 32-ounce bottle of All laundry detergent that has been
concentrated to reduce the container's size. The goal, the company said, is for
all laundry detergent suppliers to offer similar packaging by the end of the
year. Asked why Wal-Mart, whose critics have railed against its
wages and health insurance plan, chose to focus on the environment, Mr. Scott
said: "There is work going on in all of those areas. But there is not the
ability to change as much in many of those areas as we can change in this area
of environmental sustainability." The
company is also keenly aware that environmental issues are a high priority to
the higher-income shopper that Wal-Mart is courting with a new line of
urban fashions, 400-thread-count sheets and a line of baby clothes made with
organic cotton. "That customer was not the inspiration" for the
proposals, Mr. Scott said, but added: "I think an outcome of what we are
doing with sustainability" is "that customer will have a better
feeling about Wal-Mart and more positive reaction to Wal-Mart." The commitments to environmental sustainability come after
what the company described as an intense, yearlong listening tour that took Mr.
Scott and his top managers to a maple syrup farm in New Hampshire, where they
studied the impact of rising world temperatures, and the cotton farms of
Turkey, where they examined the role of toxins in clothing manufacturing. Mr. Scott said in the interview that company executives next
week would talk to Chinese government officials to learn about, and try to
influence, that country's embryonic program to encourage environmentally sound
manufacturing practices. An Feng, the director of the Auto Project on Energy and
Climate Change, based in Beijing, said in a telephone interview that the
government was calling for business and nonprofit partners to help shape its
efforts. "It's a big challenge" to come up with such a system, he
said. The trucks in Wal-Mart's fleet, the nation's
largest, have a fuel efficiency of about 6.5 miles per gallon. "They can do at least 13,"
said Amory Lovins, chief executive of the Rocky Mountain Institute, a nonprofit
organization that serves as a consultant to companies on energy efficiency and
has performed work for Wal-Mart. "They
are a big enough buyer to get truck suppliers' undivided attention." Mr. Lovins added: "The reason Wal-Mart's leadership in
this area is so important is that they have the scale and market power to
change what is offered, and to change it rapidly." Carl Pope, the executive director of the Sierra Club and a
board member of Wal-Mart Watch, a group critical of Wal-Mart, said that, from
an environmental standpoint, Wal-Mart's stated goals would bring tangible
improvements. But, he said, they had not addressed the
land-use impact
of locating new stores
in rural areas, covering fields or wetlands and prompting customers to consume
extra gasoline to reach them.
Even so, "these are positive steps,"
Mr. Pope said. "If they do these
things, it's not greenscamming. If they did what they say they will,
it would be major shift." Michael Barbaro reported from Bentonville, Ark., for this
article, and Felicity Barringer from Washington. http://www.nytimes.com/2005/10/25/business/25walmart.html |
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