The GOOD 100: Wal-Mart’s Sustainability Push

The Big Blue-green Monster: Wal-Mart is pushing us toward sustainability more than you could ever imagine.

In 2005, Wal-Mart was a piñata that liberal critics loved to bash, owing to a litany of sins ranging from low wages to union busting to encouraging sprawl. So when Lee Scott, the CEO at the time, bounded onto the stage at Wal-Mart’s headquarters in Bentonville, Arkansas, and announced that energy-efficiency would be “at the heart of the company,” it seemed like another flaky corporate stunt designed to cool a public backlash. Five years later, it looks different: In Wal-Mart’s own hyper-efficient, bulldozing fashion, it has become arguably the greatest force for green in corporate America.

“Wal-Mart can create a market by itself,” says Kory Lundberg,who works on Wal-Mart’s sustainability efforts. She’s not exaggerating: With more than $400 billion in revenues, Wal-Mart accounts for more than 11 percent of U.S. retail sales (and the number’s growing); the $200 billion it spent on merchandise in 2007 supported 3 million jobs. The company employs another 2.2 million people directly. When Wal-Mart talks, 60,000 suppliers listen.

The company has given itself three environmental mandates: to use only renewable energy, to produce zero waste, and to sell sustainable products. Progress on these has been stunningly fast: Wal-Mart is now the largest private producer of solar power in the United States, with nearly 40 stores fitted with photovoltaic arrays, and it’s working on a prototype store that will cut energy use by 25 to 30 percent; between 2005 and 2008, it increased its trucking efficiency by 38 percent, with plans to have it doubled by 2015; it’s working toward making all of its appliances Energy Star-rated; yearly, it spends $500 million on energy-efficient technology; and it’s now developing a scorecard to rate the sustainability of its suppliers.

There are, of course, reasons to be skeptical, but they’re not the reasons you’d suspect. Though its broader goals are still far off, Wal-Mart’s commitment to energy-efficiency seems durable. The savings generated by going green make unimpeachable sense to its business, which has always been fanatical about cutting costs.

But as Wal-Mart grows, can such a huge, networked operation that spans the globe ever be truly green? “The intriguing part is to see whether they’ll stop with low-hanging fruit like local energy costs, or dig deeper into their supply chain,” says Eric Fernald, the director of research at KLD, a firm that vets socially responsible investments. “Will their bigness cap how green they become?” That’s a question not only for Wal-Mart, but for our entire economy. Its success is a test case for our own.

Corrected: This article originally misattributed the quote in the second paragraph to an Edelman representative named Tristan Roy.