That’s what we saw with Katrina: Our associates, customers and suppliers occupy the same towns, our children go to the same schools, and we all breathe the same air. These challenges threaten all of us in the broader sense, but they also represent threats to the continued success of our business.
During Katrina, I was reminded of the vision and innovation of Sam Walton. We became who we are by serving the underserved. The smart folks predicted we’d lose our shirt with a discount store in a small town. There is another crowd of smart people who think that if a company addresses the environment, it will lose its shirt. I believe they are wrong.
I believe, in fact, that being a good steward of the environment and in our communities, and being an efficient and profitable business, are not mutually exclusive. In fact they are one and the same. And I can show you why.
Our environmental goals at Walmart are simple and straightforward:
- To be supplied 100 percent by renewable energy.
- To create zero waste.
- To sell products that sustain our resources and environment.
These goals are both ambitious and aspirational, and I’m not sure how to achieve them.....at least not yet. This obviously will take some time.
But we do know the way.
There is a simple rule about the environment. If there is waste or pollution, someone along the line pays for it. For example, if our trucks are inefficient from a fuel standpoint, we’ll pay for that at the diesel pump. If the dumpsters behind our stores fill up with trash, you can be assured that we paid someone to send that trash to us, and we will pay someone to take it away.
You know, in the last 43 years our Walmart associates have become some of the most productive retail workers in the world. Why not spend the next four decades making our trucks, refrigerators, stores, lighting, packaging, shipping – every aspect of our business -- the most productive in the world? This will be good for the environment, it will save us money, and in some cases, it will actually add profits to our bottom line.
Who better than Walmart to make a kilowatt of electricity go twice as far, or a gallon of diesel take our trucks twice the distance? Or three times? Who better than Walmart to stretch our energy and material dollars farther than anyone ever has? To help lower our energy bills and gas prices for years to come? We didn’t just get needed goods to Katrina victims -- we did it less expensively than anyone. The environment is begging for EDLC.....for the Walmart business model. And if we do that, everyone will benefit.
Let me give you some specific examples that have a direct tie to our business:
We have one of the largest private fleets in the U.S. At today’s prices, if we improve our fleet fuel mileage by just one mile per gallon, we can save over 52 million dollars a year.
We will increase our fleet efficiency by 25 percent over the next 3 years and double it within ten years. If implemented across our entire fleet by 2015, this would amount to savings of more than 310 million dollars a year. Compare that to doing nothing.
By being the leader, we will not only change OUR fleet, but eventually change trucks everywhere in the world. We will do ourselves a big favor, clean the air for our children, create new jobs, improve U.S. productivity, positively impact our country’s energy security, and more.
There is a technological revolution going on out there with respect to buildings, heating, cooling, compressors, lighting, refrigeration and more. Walmart has always been a technological leader. And we are going to do it again with our stores. We want to eliminate 30 percent of the energy used by our stores.
When we opened our McKinney, Texas store, we experimented with what we think we can do. There are solar panels generating electricity for the store, shredded tires for mulch, heating supplied by used cooking and motor oil, mature trees shading our buildings, and wind turbines.
Our customers flocked to it and the store manager is enjoying nearly 10 percent energy efficiency gains versus a “normal” Super Center located a couple of miles down the road. While that is not enough to cover the cost of building the store, we are learning, and with our scale that will pay off as we introduce these technologies in new stores and clubs.
Increasing our efficiency in energy not only reduces dependence on oil and saves money; it also avoids greenhouse gas emissions.
We are looking at innovative ways to reduce our greenhouse gas emissions. This used to be controversial, but the science is in and it is overwhelming. Climate change doesn’t cause hurricanes, but hot ocean water makes them more powerful. Climate change doesn’t cause rainfall, but it can increase the frequency and severity of heavy flooding. Climate change doesn’t cause droughts, but it makes droughts longer. We believe every company has a responsibility to reduce greenhouse gases as quickly as it can.
Walmart can help restore balance to climate systems, reduce greenhouse gases, save money for our customers, and reduce dependence on oil, and we are committed to the following:
1. Aggressively investing approximately $500 million annually in technologies and innovation to do the following
- Reducing greenhouse gases at our existing store, club and DC base around the world by 20 percent over the next 7 years.
- Designing and opening a viable prototype that is 25-30 percent more efficient and will produce up to 30 percent fewer greenhouse gas emissions within the next 4 years.
- Increasing our fleet efficiency by 25 percent in the next 3 years, and doubling efficiency in the next 10 years.
- Sharing all learnings in technology with the world, including our competitors (the more people who can utilize this type of technology the larger the market and more we can save our customers)
2. Aggressively pursuing regulatory and policy change that will create incentives for utilities to invest in energy efficiency and low or no greenhouse gas sources of electricity, and to reduce barriers to integrating these sources into the power grid.
3. Assisting in the design and support of a green company program in China, where Walmart would show preference to those suppliers and their factories involved in such a program.
4. Initiating a program here in the U.S. over the next 18 months that would show preference to suppliers who set their own goals and aggressively reduce their own emissions. These commitments are a first step. To address climate change we need to cut emissions worldwide. We know that these commitments won’t even maintain our fast growing company’s overall emissions at current levels. There is more to do and we are committed to doing our part.
Reduction of waste is our second goal and represents one of our most visible opportunities. Think about it....if we throw it away, we had to buy it first. So we pay twice, once to get it, once to have it taken away. What if we reverse that cycle? What if our suppliers send us less, and everything they send us has value as a recycled product? No waste, and we get paid instead.
We are already doing this with existing equipment utilizing a new process called “sandwich balers” at 99 Sam's Clubs and 548 Walmart stores. Through this process, we are now recycling plastic we used to throw away. If all stores and clubs were on this program it would have added $28 million to the bottom line this year.