April 17, 2024

Off the Shelf: Behind the Greening of Wal-Mart

My latest intellectual Bosnia has been the knot of issues that’s come to be known as “sustainability.” In this regard, I suspect I’m not alone, especially among business people, many of whom still tend to associate these ideas with increased cost and government regulation.

The idea that “going green” could actually be profitable, a notion put forth by economists as long as 20 years ago, remains a source of skepticism in some quarters. If you still need convincing, pick up Edward Humes’s excellent new book, “Force of Nature” (Harper Business, 265 pages, $27.99), the story of how the world’s largest retailer, Wal-Mart, came to go green. I’ll wager that you won’t look at sustainability issues quite the same way again. It certainly opened my eyes.

This little book is easily read in two airplane flights, and it’s well worth the time. Mr. Humes, a Pulitzer Prize winner in 1989 for articles about the military, tells how Jib Ellison, a onetime California river-rafting guide, all but singlehandedly persuaded Wal-Mart to embrace sustainability as part of its core culture. Starting with a meeting in 2004 with H. Lee Scott Jr., then Wal-Mart’s chief executive, Mr. Ellison demonstrated that sustainability wasn’t just tree-hugger talk. In its simplest form, sustainability means eliminating waste. And eliminating waste saves money. That got Mr. Scott’s attention.

One of Mr. Ellison’s first projects for Wal-Mart showed how easily this could be accomplished. He noticed that the colorful cardboard packaging for the company’s Chinese-made toy trucks was far larger than needed. He suggested reducing the size, which saved millions of dollars, not to mention hundreds of thousands of tons of cardboard that otherwise would find its way into landfills.

That, in turn, led to a Wal-Mart crusade to reduce packaging size across its product lines, saving the company an estimated $3.4 billion a year — that’s billion with a “b” — while reducing trash. Since that first initiative, Wal-Mart has charted a new green course that’s been widely noticed, and imitated, throughout the corporate world.

The company has brought in eco-friendly consultants who have helped find innovative ways to reduce waste almost everywhere, from the use of chemicals to something as simple as installing electrical generators in the trucking fleet, so that refrigerated trucks don’t have to idle overnight. In recent years Mr. Scott pushed green initiatives even further, forcing thousands of Wal-Mart suppliers to embrace sustainability as well.

The author makes clear that Wal-Mart did not embark on this course out of a sense of corporate do-goodism. The company, the book says, had long had an insular culture that looked askance at outsiders, especially those who wanted it to change — and that went double for environmentalists.

At the time Mr. Ellison walked into Mr. Scott’s office, the company was being pummeled by a multitude of opponents, from environmentalists to entire city governments, accusing it of driving mom-and-pop retailers out of business, underpaying its “associates” and union-busting. Going green has given Wal-Mart a badly needed public-relations boost as it continues to face harsh criticism on those other fronts.

But once Mr. Scott saw that sustainability could be profitable, he went whole hog. Mr. Ellison took Mr. Scott and others on scores of side trips to make his points — for example, showing an executive in apparel merchandising just how chemical-laden a conventional cotton farm in Turkey was, compared with an organic farm just across the road. If you could sell an organic cotton T-shirt for the same price as the chemically treated shirt — and you could, Mr. Ellison showed — why wouldn’t you?

Eventually, Wal-Mart came to embrace a wide spectrum of environmental causes, not just for the P.R. and bottom-line benefits, but also, as Mr. Humes demonstrates, for its future. Wal-Mart shoppers are mostly women, and the next generation of women shoppers — today’s teenage girls — tend to feel very strongly about sustainability issues. If Wal-Mart didn’t go green, Mr. Scott told his people, the shoppers of 2020 would quickly go to Target. Mr. Scott retired in 2009, but Wal-Mart’s commitment to sustainability has remained strong under his successor, Mike Duke.

THE results have been impressive, on items big and small. According to Mr. Humes, it reduced its overall carbon emissions rate by 16 percent from 2005 to 2008. Wal-Mart’s 2010 progress report on sustainability also shows that it sharply reduced its use of plastic bags; donated to food banks 127 million pounds of food that previously would have been discarded; reduced printouts of store reports by 350 million pieces of paper, saving it $20 million; and sharply reduced or eliminated phosphates in the dish and laundry detergents it sells in many countries.

“Force of Nature” doesn’t offer the compelling business narrative of some other books — there are no boardroom shouting matches, or much drama at all — but that doesn’t matter. Mr. Humes does here what the very best business books do. He finds a good story to help illuminate an issue of surpassing importance.

The book doesn’t contain much more information than your average Fortune magazine cover article, but Mr. Humes’s prose is almost flawless, lean and clear, egoless and spare. He doesn’t deify or demonize Wal-Mart or any of the characters; in fact, he says Wal-Mart’s very business model is probably unsustainable. This is first-rate work — both by the author and by Wal-Mart itself. 

Article source: http://www.nytimes.com/2011/05/15/business/15shelf.html?partner=rss&emc=rss