Wal-Mart’s green balancing act

Posted by Nicole Eckersley on 15th April 2010

Wal-Mart chairman Lee Scott announced at Fortune’s Brainstorm Green conference on Monday that the company is dedicated to greening its business practices, and emphasised the congruity between sustainability and profit.

“We have approached sustainability from a business standpoint, not from the standpoint of altruism.  We believe that if we as a company focus on waste, we can make Wal-Mart a better company while at the same time being a better citizen,” he said in the panel interview.

Mr Scott said that while most of Wal-Mart’s customers may not want to pay 30-40% more for a sustainable product, that doesn’t mean they don’t care about the environment.  He pointed out that most of Wal-Mart’s customers operate from paycheck to paycheck.

“When you ask them to pay more for a green product, you are asking them to cut something else out of their life,” he said.  “They’re willing to pay a little bit more, and they can afford to pay a little bit more.”

Sustainability has also paid off for Wal-Mart’s bottom line, after repacking of toys saved the company 215 containers worth of shipping.  Efficient loading of trucks has reduced fuel costs by over a third.

Wal-Mart has gone from environmental pariah to industry leader, receiving praise for its goal of 100% renewable energy usage and zero store waste, and for requiring its suppliers to document their carbon footprint.

Wal-Mart is also looking into ways to reduce the impact of their ‘big-box’ store building practices, including finding new tenants for outgrown Wal-Mart buildings and including recycled materials in the construction process.

“The federal government isn’t asking a Chinese company if they’ve done their carbon footprint, but Wal-Mart is,” said Greenpeace research director Kert Davies. “They are way ahead when it comes to this.”