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The Walmart "Green" Effect

Words by CCA LiveE

The following post is part of the course work for “Live Exchange” the foundational course on communication for The MBA Design Strategy Program at California College of the Arts. The rest of the posts are presented here.

by Hannah Strobel

Mention the word Walmart in any social setting and you are bound to raise an eyebrow, evoke an emotional response and either spend the rest of the conversation defending your opinion or backing up your claims.

Why is Walmart such a polarizing force? Perhaps it is because of its sheer scale, its immense presence or the absolute need it represents to so many people in the world as an access point of food, clothing and basic living items for an affordable price.

I interviewed several former Walmart senior executives (who chose to remain anonymous) about Walmart’s policies, intentions and efforts in California. I also researched many articles on the environmental efforts that the company is making across the state, the country and the world. As one of the largest corporate citizens of the earth, Walmart is an obvious bellwether for policy, change and effect in environmental causes.

A good place to start would be some of the efforts being made toward sustainability, an initiative that former CEO Lee Scott began in 2005 and current CEO Mike Duke continues. Here are Walmart’s three overarching goals (from Walmart’s Sustainability website) in the area of corporate sustainability:

  • To use 100 percent renewable energy

  • To create zero waste

  • To sell products that sustain people and the environment

As of the end of 2011, Walmart has completed updating its waste reduction policies for all of its 4,400 stores, distribution centers and locations across the United States. It continues its focus on committing zero waste to landfill. And, since 2005, Walmart has lowered the carbon footprint of its stores by more than 10 percent and reduced the pollution contributed by its trucking fleet by several times that amount. Smarter choices in route planning, energy-saving lighting and refrigeration choices for store designs and efficiencies from such diverse sources as better streamlining the design of distribution trucks has saved Walmart hundreds of millions of dollars. Reducing packaging, for a company that transacts as much merchandise as Walmart, has resulted in hundreds of millions of dollars in shipping and materials cost savings. Demanding that manufacturers shrink laundry detergent bottles to offset costs and reflect a “green” attitude, the Walmart “effect” can be easily seen: 400 million gallons of water, 95 million pounds of plastic, 125 million pounds of cardboard and half a million gallons of diesel fuel saved over a three-year period.

In theory, these savings are passed on to us - the consumer.

According to executives, California has been a state where Walmart has focused many of its sustainable efforts, in order to test policies and procedures prior to nationwide rollout. California is a perfect test state for many such company programs with a widely diverse ethnic population and large and diverse economic community structures.

The company has cut its waste 81 percent in California - a pilot program now going nationwide. By finding new uses for former trash - turning plastic waste into dog beds, food waste into compost sold in its stores and donating expired (but still healthy and edible foods) to food bank donations, the waste Walmart once paid to have hauled away is now earning the company more than $100 million a year.

California represents a largely untapped market for Walmart; the state tops the list of most resistant to the company’s effort to enter this market. With an environmentally conscious culture, California often sets the example for others to follow in waste management, pollution standards and recycling efforts. Walmart can clearly see the proper pathway to success with California: combine the social and environmental efforts it currently is practicing in a well-communicated media plan with the opportunity to involve California communities in “greening” efforts resulting in a winning relationship.

In his article in March 2011, “Walmart Diverts 80% of its California Waste From Landfills, Leon Kaye gets at the heart of this business strategy. Kaye writes:

Walmart, which has had a huge challenge entering some of California’s cities, now takes a leadership role in landfill waste diversion programs across the state. The super-center giant’s zero-waste model could be one that its competitors follow.”

There is a correlation that can be made between the “Walmart effect” (the ability it has by sheer scale of effort to impact change on its competitors) and the “California effect.” This term, coined by David Vogel, a business professor at UC Berkeley, expresses the idea of the “upward harmonization” of regulations that California, by its astute consciousness of environmental issues, causes the rest of country to follow. Higher emission standards, tighter pollution regulations and stricter recycling laws are hallmarks of California-style legislation.

This effect has come about from the coupling of these stricter standards with a large market economy. California would be ranked 8th in the world, just a bit higher then Canada, if it were an independent country. Access to this market is mission-critical for any super-powered retail company and compliance to these standards critical to that mission. The executives I spoke with agreed that, without California, Walmart would remain at a economic disadvantage to its competitors.

Pausing to consider the effect Walmart could have on its competitors and the industry as a whole is a worthy ponder. By adhering to the needs of the California marketplace, Walmart has additionally positioned itself as a “California” of the retail industry, requiring labeling, environmental planning and eco-consciousness from its participating vendors. Then, the impact stretches beyond the California marketplace. By leading the way, Walmart takes an advantageous position in consumer minds, placing itself ahead of its competitors, and directly in the sweet spot of the green consumer.


These articles were created as part of the course work for “Live Exchange” the foundational course on communication for <a href="https://www.triplepundit.com/category/cca-livee/">The MBA Design Strategy Program at California College of the Arts</a>. <a href="https://www.triplepundit.com/category/cca-livee/">Read more about the project here</a>.

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