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Report: Walmart Is Not Walking the Walk

RP Siegel | Monday March 12th, 2012 | 1 Comment

A report by the Minneapolis-based Institute for Local Self-Reliance (ILSR) entitled “Walmart’s Greenwash” examines the retail giant’s environmental impact and finds that the results are falling far short of the promises.

According to senior researcher and author Stacy Mitchell, “Walmart’s sustainability campaign has done more to improve the company’s image than to help the environment.”

Of course, a giant retailer like Walmart needs to maintain the goodwill of its customers. So when a number of negative reports about the company’s environmental and social justice performance began to impact the company’s image, the company needed to respond. And since, according to then-CEO Lee Scott, improving working conditions for their employees would be too expensive, they decided to go green instead.

In 2005, the company announced its sustainability program, which has consisted of a series of announcements regarding the reduction of energy use, reducing waste and selling healthier foods. This is consistent with the company’s strategy to grow its market share in the Northeast, where environmental awareness is high.

Yet, according to the ILSR report, the program has been heavy on promises with little in the way of accountability, and more importantly, little in the way of improvement of the company’s footprint.

For example, as of 2011, only 2 percent of the company’s energy consumption was from renewable sources, a far cry from the company’s stated goal of 100 percent. Yes, there have been news items about putting solar panels on rooftops in California and buying wind power in Texas. Unfortunately, these are only drops in the bucket. Why so little? “Because wind and solar power generally cost more than electricity from coal, nuclear or natural gas in most places, Walmart can’t or won’t buy clean energy on a scale that matters,”  says sustainable-business reporter Marc Gunther. Meanwhile the company’s greenhouse gas emissions continue to rapidly increase. Between 2005 and 2009 the company’s US GHG emissions increased by 7 percent while in China they doubled. The rate of increase of renewable power is nowhere close to the projected growth of the company in size and number of its stores.

Yes, energy efficiency measures implemented in US stores built before 2006 have saved roughly 1.5 million metric tons of CO2 annually. But at the same time, new stores built since then have added 3.5 million additional tons. And while the company’s growth and sales targets have very specific dates associated with them, the efficiency and renewable energy targets remain unspecified. The company plans to add roughly 85 million additional square feet between 2011-2013, increasing sales by some $25 billion.

Contributing to that growth is the company’s newly improved public image, cheaply bought with largely empty promises of more sustainable behavior and wishful thinking on the part of both customers and journalists.

As to what is being sold inside those cavernous facilities, the company’s relentless drive for lower prices has driven suppliers to create ever cheaper goods in the worst sense of the word, with dire consequences for the planet. Just look at clothing for example. Because clothes are so cheap and so shoddily made today, we buy far more of them. The average consumer back in the mid-1990s bought 28 items per year. Compare that with the 59 items they buy today, throwing away 83 pounds of it annually, four times as much as we did in 1980. Then there is the $6 toaster, which pretty much speaks for itself. If it breaks after six months, you just buy another one.

Then there is the ever-important question of location. There can be no doubt that Walmart, by locating their stores at the outskirts of town, where there is plenty of room available,  has contributed more to sprawl than perhaps any other company. This is a triple whammy in that it often destroys pristine habitat, encourages people to move further away from town and thus commute farther to work, which in turn contributes to the decay of pedestrian-friendly urban centers. Americans on average now drive 1000 miles further to stores each year than they did in 1990. Walmart’s stores and parking lots now cover some 60,000 acres in the U.S. alone. A significant number of these have been closed and lay vacant like a giant blight on the land, as the company has opted to build a larger store just a mile or two down the road and has little obligation regarding the abandoned property.

Back in 2010, I wrote about the Sustainability Index, which sounded promising at the time. Now two years old, the initiative has little to show for its efforts other than 75 corporations including Monsanto and McDonalds that have joined the team, paying at least $100k to do so. “You end up with manufacturers voting only for criteria that they already meet,” says Barbara Kyle, director of the Electronics TakeBack Coalition. After keeping tight-lipped for the first couple of years, “ the consortium has finally said that it is not in fact developing a rating system or even product-specific information. It is assembling general lifecycle data for types of products – a typical environmental footprint for orange juice or detergent, say, but not for specific brands within those categories.”

In other words, the process has no teeth that could possibly bite any of its contributors.

Still, anyone close to the company fully expects them to bully their suppliers (70 percent of which are in China) on environmental performance, much as they have done for years on prices, if for no other reason than the fact that higher energy efficiency leads to lower prices, so long as Walmart doesn’t have to pay for it. Indeed some improvements were made like, for example, with towel-maker Loftex, which has cut its electricity use by 25 percent and water use by 35 percent.

As for food, Walmart has become the most dominant force in our food system, accounting for 25 percent of U.S. food sales and is ramping up its efforts to take over even more. This has forced consolidation of regional store chains and supply networks trying to compete, putting more and more pressure on farmers to reduce prices and promoting an increasingly industrial model for the food supply. The high-profile campaigns, like addressing food deserts, which are the result of poverty, are largely based around issues that the company had a hand in creating. No doubt, this new trend will squeeze out many more local food stores and co-ops though the company’s waning interest in organic food should maintain a healthy niche here for those truly concerned with what they put in their bodies.

If there is a lesson to be learned here, it is surely to let the buyer beware. Promises are cheap, especially when accountability is lacking. But as Mitchell suggests, do we simply accept Walmart’s takeover as a fait accomplit and frame the conversation in those terms, being grateful for whatever improvements they make, given their scale and potential impact, or do we ask, is allowing Walmart to take over an ever larger share of our economy, truly good for the planet? True, the size and reach of the company could potentially become a major force for good, at least in theory, which is what we were hoping to see. But, perhaps it is time to ask if the need to not only maintain that size, but to continue growing it, precludes any credible path to sustainability?

[Image credit:brandonevano:Flickr Creative commons]

RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water. Now available on Kindle.

Follow RP Siegel on Twitter.


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  • Dave

    I don’t see any fundamental recognition or shift of the business model by company leaders. Whenever the next quarter and growth strategies resembling cancer, are your prevailing model, discussions about sustainability aren’t even honest.

    It is easy to make announcements like the supplier sustainability index; it is hard to follow through.  The work of long term sustainability is complicated and difficult, requiring real commitment.When I think about corporations who are making truly transformational change I think about companies such as Interface or Patagonia; where leaders recognized and called out the issues as they saw them and then proceeded to create fundamental corporate culture shifts.

    On the other hand it all comes back to the consumer and investor, don’t buy or invest in Walmart and then see what might happen…