Wal-Mart: Jolly 'green' giant?

In an effort to go from retail villain to eco-hero, the powerhouse chain has been ringing up real savings -- $25 million here, $6 million there -- with its new sustainability program. Now it wants shoppers to change, too.

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By Ann Monroe, MSN Money

What can the world's biggest retailer do to make a greener planet?

A lot -- or so Wal-Mart is saying. The giant retailer has a superambitious, and controversial, plan to cut not only its own impact on the globe but also that of its suppliers and customers. Tour a 'green' Wal-Mart

As with everything else Wal-Mart does -- the company rings up a whopping $355 billion in sales -- the consequences could be huge.

Take just one small piece: Wal-Mart has installed auxiliary-power systems in its fleet of 18-wheelers so that drivers don't have to keep their engines idling to run the air conditioning when the trucks are stopped.

The result? Try $25 million off Wal-Mart's costs every year. And the 100,000-ton-a-year savings in greenhouse gases from these trucks? That's the environmental equivalent of taking 20,000 cars off the roads.

That's just the beginning. By 2015, Wal-Mart intends to double the fuel efficiency of its new heavy-duty trucks. That move alone, between now and 2020, would keep about 26 billion pounds of carbon dioxide out of the air and save the company $300 million a year. Wal-Mart trucks power down

The company is changing a lot more than its trucks. Janelle Kearsley, the retailer's director of corporate strategy and sustainability, says Wal-Mart started looking hard at its energy use, waste and product sustainability two years ago. The company discovered it could do a lot better.

"We thought we were efficient already," she says. "But once we started asking questions, we found even simple things that have great benefits."

For instance: Replacing incandescent bulbs in all the ceiling fans on display in the company's stores reaped savings of $7 million a year. Now Wal-Mart is using in-store displays to promote compact fluorescent bulbs to consumers, and has sold over 100 million of them - more than one per customer - saving enough energy to run a city the size of Philadelphia.

The company is also recycling its own plastic bags and encouraging shoppers to bring theirs in, too. It's working with suppliers and the U.S. Environmental Protection Agency to sell more-energy-efficient electronics. It's already buying shrimp from sustainable fisheries and aiming by 2010 to sell only sustainable seafood.

The list goes on, although some innovations are still in the test stage. Wal-Mart now carries concentrated detergents in smaller packages (result: less packaging waste), as well as organic-cotton sheets and

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biodegradable hangers. On the operations side, a few pilot stores are trying out low-energy LED lights in freezer cases, installing low-flow toilets and waterless urinals, and adding solar panels and windmills outside to generate power from renewable sources.

There's an optional checklist to encourage suppliers to cut down on their packaging and other waste, and energy-saving advice for small-business customers. (For more information on the program, click here.)

Wal-Mart's enemies -- and they are many -- say the company is just seeking positive public relations. It could certainly use some. Sales growth has slowed, forcing the company to scale back its expansion plans. A recent confidential report commissioned by the retailer -- and leaked to the news media -- suggested that its low-price policy was hurting its business. Last April, a fired former employee revealed the company had spied on employees, critics and shareholders, including a group of Benedictine nuns.

That's not to mention the hard-nosed business practices that have brought the company bad publicity for years: Critics have howled that Wal-Mart pays low wages, treats its employees shabbily, squeezes suppliers and devastates local retail communities.

So the company's big green makeover is not without controversy. When Wal-Mart teams up with groups such as the Rocky Mountain Institute and Conservation International -- and hires former activists from the Sierra Club and the Environmental Defense Fund -- does it truly want their expertise, or is it simply doing a bit of "greenwashing"? Is Wal-Mart good or evil?

The cautious answer is: Time will tell.

The company is only two years into a plan for transformation that will span a decade or more. And that plan is just starting to produce results. Kearsley says she can't tell us yet whether the company will sell those 100 million compact fluorescents, though sales so far are "fairly decent."

But I'm going to go out on a limb. I believe Wal-Mart really means it. And I think the company means it for the same reason a lot of other companies do: In a business world that's always competitive and often mean and ugly, going green gives Wal-Mart, and its employees, a source of pride and enthusiasm.

There are cost savings as well, if not exactly a competitive edge. When it comes to trying to stop global warming, there are no trade secrets, says William Wertz, a spokesman for the company's Aurora, Colo., store, where it tries out many of its green techniques. "I've shown competitors around," he says.

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Wal-Mart's not alone in this green movement. Many of America's biggest companies have jumped with both feet on to the environmental bandwagon, even asking the government -- believe it or not -- for more regulation. (More than two dozen major corporations, including Shell, General Electric and Ford, have joined the U.S. Climate Action Partnership, which is pushing for quick legislative action on climate change, including mandatory carbon caps.)

Sure, they're out for profit: Savings derived from cutting waste in energy and materials go straight to the bottom line. And there's lots of money to be made selling products that help make the world greener.

But I think the men and women who run those companies, and their employees, also realize that when it comes to global warming, we will all sink (literally) or swim together. Global warming offers companies a clear opportunity to do well by doing good. Why on earth wouldn't they embrace it?

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Produced by Peggy Collins

Published Jan. 18, 2008