Behind the Hype of Walmart’s Sustainability Efforts

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In 2005, Lee Scott, CEO of Walmart, was troubled. Activists had recently illuminated Walmart’s connections to human rights abuses, and his company’s stock was in worse shape than California’s water supply. Then, a storm arrived. As hurricane Katrina drowned the Gulf Coast coast, it provided Walmart its salvation.

The company gave district and store managers in affected states free rein to do whatever they thought would help their surrounding communities. One manager in Mississippi literally bulldozed a path into her store to acquire essential supplies and provide them to those in need. In some areas, Walmart’s efforts outpaced government relief.

The media, and even activist groups opposing Walmart, took notice, lavishing the corporate giant with praise. And Scott began to question whether Walmart could use its prodigious size and resources not just to reap profits, but to help people and the planet. Doing so might even pay huge dividends in Walmart’s public relations.

The CEO’s new perspective spurred one of the biggest sustainability initiatives ever enacted. Since Katrina, the company has dramatically reduced its waste and taken steps to source products from more sustainable suppliers. Earlier this year, Walmart partnered with utilities to increase its renewable energy production by 1.6 billion kilowatt-hours—enough to power over 140,000 homes for a year.

But a lack of transparency around its total energy consumption, waste production, and product sustainability makes it difficult to contextualize many of Walmart’s environmental wins. And given the company’s sheer size, there’s plenty of reason to question whether Walmart is doing enough.

Managing green

Scott laid out three goals in 2005: Produce zero waste, use 100 percent renewable energy, and sell products that “sustain our resources and environment.” (The last goal has since been changed to “that sustain people and the environment.”)

To accomplish this Walmart had to do two things. It had to make its business and supply chain more environmentally efficient, and it had sell more sustainable products.

“The punchline,” said Andrew Spicer, a University of South Carolina professor and leading expert on Walmart’s sustainability initiative, “is that they did better at those things they had under their control, and which they could measure.”

Things like Walmart’s transport fleet, waste production, store design, and energy use could be tweaked on the fly. Imposing standards on its suppliers proved far more difficult.

To spearhead its environmentalist overhaul, Walmart leaned on Blu Skye Consulting, a company with leadership intertwined with Conservation International. By 2007, Blu Sky had established 14 Sustainable Value Networks or SVNs, decentralized departments focused on waste, energy, and water usage.

The SVNs split progress into long-term goals, such as making their transport fleet and stores more fuel and energy efficient, and quick wins designed to boost enthusiasm, garner headlines, and demonstrate capability. For instance, in 2007, Walmart’s plastic recycling saved $3.5 million and prevented 1,100 tons of plastic from making its way to landfills.

Since then Walmart has made bounds in waste reduction, now reporting that 82.4 percent of its US operations’ waste is diverted from going directly to a landfill. Much of this waste reduction has been the product of Walmart pressuring suppliers into reducing packaging, as when it had Kid Connection reduce packaging for a toy car/truck set, saving 5,200 trees.

Walmart has pushed to replace confusing food labels such as “Best if sold by” to “Best by” in an effort to reduce food waste. And unlike many, the company sells much misshapen produce and runs donation, animal feed, and composting programs for old food. In a report released earlier this year by the Center for Biological Diversity, Walmart was the only one of America’s 10 largest grocery companies to score a B grade on food waste. No one got an A.

Walmart has also expanded programs to refurbish old equipment in its stores and warehouses, and to recycle waste. The company Ecotech, for example, works with American Walmarts to recycle 4 million pounds of plastic bags into a variety of products, according to Walmart’s Director of Sustainability Communications Micah Ragland. In 2017, Walmart claims to have recycled more than 421,000 tons of cardboard and plastics globally.

But these numbers don’t tell the full story. Walmart keenly highlights specific waste-reducing initiatives, but comprehensive figures on total waste production aren’t publicly available. When Earther asked Walmart representatives for these figures, we got only statistics about a hodgepodge of waste and carbon footprint-reducing initiatives.

The same goes for Walmart’s energy use. The company has overhauled its refrigeration, lighting, and more to lower energy use. It aims to reduce emissions by 18 percent and draw half of its energy from renewables by 2025. Estimates that 28 percent of Walmart’s global energy consumption is renewable abound.

Yet, Walmart is hardly transparent on its total energy use. When Earther asked Walmart representatives for figures on its net energy consumption, the company instead sent information on various energy-reduction and renewables programs.

The EPA, for its part, pegs the current percentage of Walmart’s U.S. energy consumption that is renewable at around 4 percent—and has since at least 2012. While that places Walmart third in the EPA’s top 30 list of green-powered retailers, Starbucks and Apple, the latter of which dwarf’s Walmart’s energy consumption, buy or generate enough renewable electricity to cover over 100 percent of their operations. Google, with over 3 times the energy consumption depends on renewables for 50 percent of its power. And more than one advocacy group has contested that the company’s growth will outpace its renewables expansion.

Ragland disputes that last claim, telling Earther that while Walmart’s overall square footprint grew slightly from 2014 to 2015, its emissions declined. Still, one could hardly be blamed for feeling that the earth’s largest company still being halfway to halfway with its renewable energy goals 13 years after they were conceived doesn’t amount to a revolution.

Selling sustainable

Selling more sustainable products is the hard part for two reasons: First, Walmart isn’t Whole Foods. It prices are low; its profit margins thin. It can’t swap out its inventory for pricier, but more eco-friendly products. And second, defining “sustainable” is really goddamn hard.

That’s why in 2009 Walmart founded the Sustainability Consortium, a group of now more than 100 companies that establish criteria for judging products’ sustainability.

As Spicer and colleague David Hyatt recount in a paper published last year, the Consortium at first set about judging products using a gold standard Earther has explored before: Life-Cycle Analyses. LCAs break down the various resources used and byproducts churned out in items’ lifecycle, including water, solid waste, greenhouse emissions and smog, to arrive at an estimate of the product’s overall environmental footprint.

The Consortium started with just 7 products. After two years, it decided the LCA method would be slow going.

So instead, the Consortium turned to a Metacritic-esque model, wherein the opinions of scientific experts, industry leaders, and published LCA studies were all reviewed in product analyses. By 2015, the group had produced a list of 110 product performance indicators, published as the “Product Sustainability Toolkit” for its members.

But if Walmart has access to a somewhat scientific way to analyze products’ sustainability, why have you never heard of it? Why aren’t green products labeled as such? As Consortium co-director Jon Johnson put it, “There is a fundamental difference between a system containing data sufficient to create a label and the label itself.”

Walmart could label products, but the moment it started doing so, it’d spark backlash. Someone, whether a chagrined company or incensed advocates, would cry bias. Maybe the “sustainable” label didn’t consider worker or animal ethics, maybe water use and carbon output weren’t weighted the way someone liked. Walmart decided it would be easier to simply not advertise its rating system, and instead pressure companies behind the scenes to make their products more sustainable.

That pressure, though, has often been lackluster. Walmart buys 70 percent of its U.S. goods from suppliers that participate (not score “x percentage,” but simply participate) in the Sustainability Index—the Consortium’s grading system. And remember, that Consortium is made up of the very companies whose products are being graded.

“We could be very cynical about that,” said Craig Smith, INSEAD Professor of Ethics and Social Responsibility. “[It’s] gonna be the suppliers themselves reporting on their own performance, so they’re gonna try to game it.”

With little public pressure or attention given to Walmart’s sustainability initiative, there’s little incentive to convince the company to ratchet its goals up or be more transparent. While Walmart’s consumer base does include some eco-conscious millennials, it predominantly targets lower-income consumers that are less likely to vote with their dollars. And Walmart simply isn’t going to drop entire categories of environmentally-damaging products. As Scott once told reporters, “If the customer wants bottled water, we are going to sell bottled water.”

At the same time, Walmart motivates other companies to clean up their act. Spicer and Hyatt observed that when consultancy Pure Strategies surveyed 100 companies to see learn who encourages their investments in product sustainability, Walmart was the top retail driver.

That makes Walmart a leader when it comes to corporate sustainability. But what does that say about our expectations? The sprawling giant is making greater strides than most, but that’s due in large part to the sheer size of its gait. As long as customers set the bar low, companies nearly as titanic will keep taking incremental steps forward, and greenwash them as auspicious leaps.