Walmart Agrees With the President: The Time for Renewables Has Come

The Huffington Post

By Leslie Dach

June 28, 2013

Leslie Dach’s blog post appeared in The Huffington Post

When President Obama laid out his plan to advance renewable energy and carbon reduction this week, it unleashed a predictable debate.

While it is common to look at the climate challenge through a political lens, Walmart has instead looked at it through a business lens.

We've applied hard analytics, developed complex models and done in-depth return-on-investment analyses. The math simply works. We agree with the President: The time for renewables has come and they can power a low-carbon economy. Sustainability and renewables are good for the bottom line.

Walmart committed several years ago to be powered 100 percent by renewable energy, and today, we are the largest on-site generator of renewable energy in America, according to the EPA.

As President Obama said in his speech Tuesday when referring to Walmart's renewable commitment, "Would the biggest company, the biggest retailer in America -- would they really do that if it weren't good for business, if it weren't good for their shareholders?"

Sustainability and profitability really can go hand in hand. The renewable energy we buy meets or beats non-renewable power prices over the course of our contracts. Once our energy program is fully implemented, we could save more than $1 billion per year globally in energy costs. Indeed, sustainability and renewable power are good for the bottom line and good for our shareholders.

But every company - as we discovered - has to work to overcome barriers and perceptions that work against cleaner technologies.

We had to bring together finance and engineering teams to develop new models. We had to fix unintentional "split incentives" where one part of our company was being rewarded to cut capital expenses while the operating cost savings were being recognized in a different profit and loss statement. When good, clean, profitable energy projects were getting lost in the day-to-day shuffle of running our business, we had to elevate them to the very top of our organization.

We have explored various power-generation strategies, including wind, solar and hydrogen fuel cells. The company now has 300 renewable energy projects in operation or under development globally. We also invested heavily in energy efficiency, including LED lighting and less-polluting refrigerants.

And there have been other forms of conservation, such as improving fleet efficiency. Last year, we delivered almost 297 million more cases while driving almost 11 million fewer miles. Fleet efficiency saved the company about $130 million last year and avoided emitting almost 103,000 metric tons of CO2.

By the end of 2011, we surpassed our goal to reduce our greenhouse gas emissions from our existing stores worldwide by 20 percent. That's equal to emissions from 445,000 average U.S. households.
We are now working to reduce GHG emissions across our global supply chain by 20 million metric tons, and decoupling our GHG growth from our business growth.

Many of these improvements can work for any company regardless of size - any company that has trucks, runs refrigeration systems or lights parking lots could do this. For others, it may be a different approach. But it is clear that it is possible to be a business that pinches every penny and simultaneously contributes to a cleaner economy.

We certainly understand that the work Walmart is doing will not solve the climate issue, but a systemic, forward-looking approach can. We applaud the President's vision and appreciate his willingness to make business a partner in this. The challenge is too big and too complex to be solved without working in collaboration.

At Walmart, we are big believers in renewable energy and carbon reduction, and the reason is simple: It's because we care about our customers, the air we breathe and the water we drink - today and for generations to come.