In 2005, the CEO of Wal-Mart Lee Scott announced an ambitious plan to make Wal-Mart a sustainable business. At the time, Wal-Mart was the arch-typical big corporation: it had 6,600 stores, 1.8 million employees, and $312 billion dollars of revenue. In terms of environmental impact, Wal-Mart used more electricity than Namibia and had America’s second largest fleet of trucks which traveled 1 billion miles annually. Wal-Mart’s environmental impact had not gone unnoticed, as up to 8% of former shoppers had stopped shopping at Wal-Mart partly due to its environmental reputation. With same-store sales lagging behind competitors, Lee hoped that by fighting climate-change, he could make an eco-friendly decision that also made business sense.
What Changes Has Wal-Mart Made to Fight Climate Change?
Burn Less Fuel
The lowest hanging fruit was finding areas to cut fuel usage for Wal-Mart’s fleet of trucks to lower carbon emissions and also lower fuel costs. One way Wal-Mart accomplished this was through best practices, such as turn-loading pallets, which increased the number of pallets that Wal-Mart could load in a truck from 24 to 26. Another way was to re-route trucks to (a) encourage more multi-stop routes, (b) route trucks to distribution centers that minimized distances, (c) reducing miles where the truck was traveling empty or half-full, and (d) route trucks to minimize hills and congested areas, which used more fuel.
Wal-Mart overshot their goal of eliminating 20 million metric tons of greenhouse gases by 2015 and eliminated 28.2 million metric tons, which is the equivalent of taking 5.9 million cars off the road. While the company continues to look for improvements, Wal-Mart already saves over $1 billion per year.
Prepare Supply Chain for Extreme Weather
For Wal-Mart, a company with a global supply chain and a global network of stores, extreme weather such as hurricanes could cause major disruptions in their supply chain. For example, to prepare for disruption from Hurricane Katrina, Wal-Mart had their own private staff meteorologist tracking the hurricane and stocked up nearby distribution centers outside the path of the hurricane to quickly resupply stores after the hurricane. As soon as Katrina passed, Wal-Mart was able to bring supplies to their stores faster than FEMA could.
Furthermore, Wal-Mart shortened their lengthy global supply chain network that heavily relied on heavily polluting cargo ships and was vulnerable to extreme global weather events. One example of this was a t-shirt manufactured under Wal-Mart’s private line. Whereas previously the cotton for the shirt was grown in Turkey, the cotton was spun into yarn and woven in China, and the cloth was cut and sewn in Guatemala, Wal-Mart changed the supply chain so that the raw cotton shipped directly to Guatemala, where it was made into a shirt. In another instance, Wal-Mart eliminated the brokers in their fish supply chain, which reduced not only the number of miles the fish had to be transported by boat and truck, but also reduced the number of hours that the fish had to be stored in energy intensive refrigerated trucks.
Wal-Mart used their leverage over their 66,000 suppliers to encourage sustainable practices. For example, Wal-Mart asked Unilever to reformulate their All brand of laundry detergent to a highly concentrated, smaller package to save on shipping costs and packaging. When Unilever showed Wal-Mart data that showed customers preferred larger containers which made customers feel like they were getting better value, Wal-Mart decided to heavily promote the All detergent to help boost sales. Eventually P&G followed suit with their detergent brands to compete, and by September 2007, Wal-Mart announced plans to require all detergent to be concentrated, which in addition to the shipping costs, also saved 400 million gallons of water, 95 million pounds of plastic, and 125 million pounds of cardboard.
What else can Wal-Mart do?
The Original Sin of Wal-Mart
By 2010, the number of people who viewed Wal-Mart unfavorably dropped to 20% from a peak of 38% in 2005. But is Wal-Mart doing all it can do? Arguably, Wal-Mart’s biggest contribution to carbon emissions is their fundamental business model itself. Wal-Mart’s business model depends on building large “big box” locations on the outskirts of town which often put smaller businesses that are within “walkable” neighborhoods out of business, forcing all residents to drive to a Wal-Mart to shop. To further help fight climate change, Wal-Mart could move their stores near public transport or into city centers. Again, it seems these eco-friendly decisions may soon make business sense due to recent urbanization trends.
Overall, I believe that, despite public perception, Wal-Mart continues to be a leader in sustainable practices in large retailers. It has used its scale to its advantage to enact change within as well as outside the organization, and I am excited to see what further improvements are up ahead.
 Ibid, 2.
 Ibid, 1.
 Ibid, 5.
 Plambeck, E.L. 2012. Reducing Greenhouse Gas Emissions Through Operations and Supply Chain Management, Stanford Graduate School of Business.