Feature Article

Wal-Mart: Every Day Low . . . Impact?

The world's largest company claims to have embraced environmental responsibility in everything from its supply chains to its waste stream.

Breaking with Wal-Mart’s usual pattern of building single-story stores in suburban areas, this three-story Wal-Mart is located in the Baldwin Hills neighborhood of Los Angeles.

Photo: Wal-Mart Stores, Inc.
“We should view the environment as [Hurricane] Katrina in slow motion.” With that statement, Wal-Mart Stores, Inc., CEO Lee Scott summarized his newfound understanding of ecological connections, following a year of listening to Wal-Mart’s critics. In his October 2005 speech, Scott signaled what appears to be a remarkable culture shift for a retail giant famous for driving its suppliers to streamline operations and reduce their costs. Can an interest in total cost of goods and services (including environmental and social impacts) coexist with a mission to deliver products at the lowest possible cost? A multibillion-dollar experiment now appears to be underway to find out.

The scale at which Wal-Mart operates is staggering. The company took in roughly $300 billion in sales in 2005, and it was the largest company in the world, according to

Fortune magazine. It has a staff of 1.6 million people at 3,700 U.S. facilities and more than 2,400 facilities elsewhere in the Americas and in Japan, South Korea, and the United Kingdom. Its indoor retail space in the U.S. alone totals nearly 600 million ft2 (60 million m2) or 14,000 acres (5,700 ha), contained in 200,000-ft2 (20,000-m2) Supercenters, 100,000-ft2 (10,000-m2) Wal-Mart stores, 130,000-ft2 (13,000-m2) Sam’s Clubs, and 42,000-ft2 (4,200-m2) Neighborhood Markets. The company reports that more than 138 million people visit a Wal-Mart in any given week, and, according to a poll conducted in December 2005 by the Pew Research Center for the People and the Press, 84% of Americans shopped at Wal-Mart within the past year.

This enormous company has plenty of critics, and from a local-economy, small-is-beautiful perspective there is plenty to dislike about a retailer that seems bent on driving down costs above all else. But when an organization this large pushes for environmental action, through its own practices and the demands it makes on its suppliers, the impacts can be enormous. In the buildings sector alone, Wal-Mart’s research and purchasing can jumpstart new technologies that might otherwise languish. This article unpacks Wal-Mart’s recent environmental initiative, including both its reach and its limitations. One can certainly harbor reservations about Wal-Mart, given the sprawl and global mass-merchandising that it epitomizes. But it’s also worth considering the force for positive change—at least in certain areas—that seems to be emerging from within this leviathan.

 

Published January 1, 2006 Permalink