Wal-Mart’s Green (P.R.) Machine

Today’s Wall Street Journal examines big businesses trying to go green and features Wal-Mart prominently:

Even companies with longstanding energy-saving programs are redoubling their efforts in light of rising fuel costs and greater pressure from the public to address global warming. Wal-Mart Stores Inc.—which by some measures is the world’s second-largest energy purchaser after the U.S. government—has undertaken a multiyear campaign to retrofit older stores with new lighting and air-conditioning systems. Company officials boast that many of these energy projects pay for themselves within two years.

The article discusses several of Wal-Mart’s environmental initiatives, but seems to miss the fact that most of these initiatives have yet to be implemented (the two “green” stores that Wal-Mart always trots out in articles like this represent a whopping .02% of the company’s total stores worldwide.) It’s great to change lightbulbs, but Wal-Mart still uses far more energy than it saves. In fact, any environmental advances the company makes will be offset by new store construction. From “Is Wal-Mart Really a ‘Green’ Company?”:

Wal-Mart’s new stores will use more energy that its energy-saving measures will save. Wal-Mart hopes to cut 2.5 million metric tons of CO2 emissions by 2013, by making its existing stores 20 percent more efficient. New stores built in 2007 alone, however, will consume enough electricity to add approximately one million metric tons of CO2 to the atmosphere. At that rate, (adding one million metric tons of CO2 per year because of new stores), by 2013 Wal-Mart will be offsetting its cut of 2.5 million metric tons of CO2 by adding 28 million metric tons of new emissions within the same time period. [Stacey Mitchell. “Keep your eyes on the size: The impossibility of a green Wal-Mart.” http://www.grist.org, March 28, 2007.]

This in addition to the company’s numerous EPA violations, its pesky habit of leaving abandoned buildings behind when it expands, its stores’ huge physical footprint (which greatly contributes to water pollution and wildlife habitat destruction), the millions of miles customers drive to get to and from these stores and the energy required to get merchandise shipped from overseas and placed on your neighborhood Wal-Mart’s shelf. The company still has far to go before it can claim its place in the environmental playbook.

From “Business Goes on an Energy Diet”:

Retailing
A key decision for any company that wants to reduce energy costs is where to entrust accountability and authority. Wal-Mart, like other big retailers, has centralized that power at its corporate headquarters.

For instance, when homeowners want to turn up the air conditioning, they only have to flick a switch. But when a Wal-Mart manager thinks his store is getting a bit too steamy, he must contact the company’s Bentonville, Ark., headquarters.

There, a monitoring team of some 100 specialists keeps constant track of the energy use at some 4,000 Wal-Mart and Sam’s Club stores in the U.S. and Canada. They have control over key systems, including air conditioning—which the company sets at 75 degrees for all its North American stores during the summer.

If a store manager wants the temperature lower, the Bentonville staff will ask a series of questions, such as the exact spot in the store that feels too warm and whether there are any obvious problems with the ventilation system. “Its not like a store manager can turn down a thermostat two degrees,” says Mr. Zimmerman, the retailer’s vice president of prototype and new format development. “He has to call us to make that happen.”

The way Wal-Mart sees it, local management should be minding other issues at the stores. “We take care of their systems,” Mr. Zimmerman says. The store manager “should be taking care of customers.”

Headquarters also monitors stores’ energy usage for problems. For instance, if a freezer door is kept open for 45 minutes, a sensor will alert Bentonville, generating an official query. Headquarters can then tap a national network of contractors to fix the problem—sometimes before the store manager even knows there’s a problem.

The “monitoring team saves the company millions of dollars by detecting and responding to situations that could cause Wal-Mart to lose money on wasted energy or spoiled food,” says spokesman Dave Tovar.

Wal-Mart is looking to cut energy costs in other ways. It is reducing food-delivery trips by buying more produce closer to customers. For instance, the company now buys peaches from 18 states in the U.S., up from two. “Right now, a lot of the price of that product can be coming from the fuel,” says Andy Ruben, Wal-Mart’s vice president for business, strategy and sustainability.

Meanwhile, the company has heavily touted its new “high efficiency” stores, which employ wind power and “waterless” urinals, as well as state-of-the-art air conditioning/heating and refrigeration systems.

The company has also embarked on a plan to retrofit key systems in many older stores. Wal-Mart will meet a target to reduce energy use by 20% in existing stores by 2012, Mr. Zimmerman says. Many of the savings will come through lighting innovations. Widespread use of light-emitting-diode lighting in refrigerated displays, for example, could cut the displays’ energy use by 80%, he says.

Wal-Mart officials say they are also, as Mr. Ruben puts it, “pushing the envelope” in prodding suppliers to eliminate excess packaging and encouraging consumers to choose more-efficient products.

Environmentalists are watching carefully to see if the company’s efforts are sustained and that it lives up to its public relations. And a recent visit to a Houston store on a sticky Sunday suggests Wal-Mart treads lightly before it does anything that rattles shoppers too much. The store included environmentally friendly skylights in some areas, and was maintained at a temperature that—while comfortable—was warmer than many other area stores. But there was evidence of energy waste: a row of some three dozen TV sets, all of which were on.

Mr. Ruben says Wal-Mart will prominently showcase more environmentally friendly products but won’t stop selling competing ones, such as less-efficient bulbs. Similarly, Mr. Ruben defends the TV display as necessary in today’s competitive environment for consumer electronics. “Everything we do comes back to what makes the most sense for the customer,” he says.

Posted by Alex Goldschmidt on Monday, August 27, 2007

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