Wal-Mart: The ‘Green’ Retail Giant

Published by MBA Skool Team, Published on October 30, 2012

Serving people in 27 countries on a scale which is unbeatable as of now speaks volumes about this retail mammoth. But what actually matters in today’s era is serving the environment of these 27 countries. This is where toughest part of corporate social responsibility starts. Wal-Mart being at the top of the critics list for its social attitude has started to regain the sympathy of the critics with number of initiatives towards building a sustainable environment.

Some of their initiatives have been admirable Moving from 15th to 3rd spot in EPA green power rankings 2012 and among the top 15 in the Newsweek’s Green Rankings are some of the highlights. Adding to these there are endless awards in Wal-Mart’s kitty. Checking some of them below mentioned initiatives adds to the social responsibility as well as “Greenness” to the Wal-Mart’s crown.

Renewable Energy Approach

Wal-Mart has pioneered the art of intertwining environment and economics into one powerful cocktail of success. The company has been able to break down the seemingly complex sustainable strategy shift into different compartments of endeavors. Best example to quote the company’s effective implementation is the punching of holes in the roof of a supercenter in Lancaster, which has helped in reducing 70% usage of lighting during daylight. Also in order to keep the building cool it has painted the walls white hence again reducing the electricity bills.

Wal-Mart has installed 115 rooftop solar installations in many countries and thus delivering 71 million kilowatt hours of electricity annually to their stores, which is huge. 26 fuel cells have also been installed in U.S to deliver 65 million kilowatt hours of electricity annually. The company has been recognized as the fourth largest green power purchaser in the Fortune 500.

348 stores in Mexico are supplied by wind power, catering to 17% of energy needs of Wal-Mart Mexico. This has reduced CO2 emissions by an estimated 137,240 tons annually. 350 stores in Texas receive up to 15 percent of their electricity needs through a four-year agreement to purchase clean energy from Duke Energy’s wind farm in No trees, Texas.14 stores in Northern Ireland supplied by wind power, with100 percent of the electricity into those stores both affordable and renewable.

To date, Wal-Mart has more than 180 renewable energy projects in operation across their global portfolio, providing more than one billion kilowatt hours of renewable electricity annually (enough to power 78,000 American homes every year). 22 percent of Walmart’s electricity needs globally are supplied by renewable sources.

Wal-Mart China completed the installation of a roof-mounted solar system at its Xiangmihu store in Shenzhen, which was a result of four years of preparation by the diligent Wal-Mart China team. Now, this solar system has the potential to reduce greenhouse gas (GHG) emissions by 430 tons annually.

Reduced waste by 80 percent

Wal-Mart is working towards an absolutely zero waste tolerance operation level. Again, the scale of the company is an ample incentive to pursue such a plan. In 2011, Wal-Mart kept 80.9 percent of all waste generated by their U.S. operations out of landfills. Wal-Mart does this by converting the food and other organic wastes into animal feed, energy and compost. This had the potential to prevent 11.8 million metric tons of CO2 emissions annually. Their zero-waste-to-landfill program returned more than $231 million to the business last year through a combination of increased recycling revenue and decreased expenses. This was not only done in United Sates, but globally as Wal-Mart in China and Brazil diverted 52 percent of operational waste from landfills in 2011. And in U.K., they now send zero food waste to landfills. Now, Wal-Mart is on track, for its U.S. stores to cease hauling waste to landfills by 2025 and is setting an example for other biggies to come in line with this.

Adding to this Wal-Mart has also put its step forward in tracking the reduction in food throwaways for which a goal baseline for 10% reduction by 2015 has been set. Also, Wal-Mart has put in a weight reduction of close to one-thirds of the total plastic bag usage. Streamlining the packaging of products has also contributed close to 14% in reducing the plastic usage. Here thermoform which is a mixture of different kind of plastics is used as a substitute to the non-renewable plastic.

Protecting the Waters

Environmental sustainability never ends if the waters are left un-checked by the company. Wal-Mart with its state of the art facilities has been able to help its U.S poultry suppliers reduce the water usage by more than 1 billion gallons in the past two years. Also adding to this Wal-Mart Mexico is the leader in water stewardship project implementation. With installation of water treatment project along with rain-water harvesting system, both these projects has reduced the dependence on outside water by close to 75%, as per Wal-Mart’s Global Sustainability Report 2012. Wal-Mart China reduced the dependence on water by 50% by 2010.

The transition to a greener Wal-Mart continues, but still has a long way to go. The horizon which Wal-Mart has touched with its global green supply chain campaign is turning out to be a bench mark for many industries. Having said that, an intrinsic approach to these endeavors results in higher reputation and equity gains in mid-term, which ultimately translates into far more value for the firm. Wal-Mart has proved its seriousness about reduction in the environmental impact which has led the critics to unclench their fists for a round of applause, at least for the moment.

This article has been authored by Anmol Verma and Mohil Chhabra from UBS Chandigarh.

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