Audio Feature: Sustainable Big Business
Who would think it possible to start a revolution with a tiny, fluorescent bulb? But when Wal-Mart sold its 100 millionth compact fluorescent bulb in little more than a year, a symbolic milestone was reached in the drive to make American business greener. It’s just one of the initiatives by the retail giant to cut packaging and save energy that Leslie Dach, executive vice president for corporate affairs and government relations at Wal-Mart, illustrated during a speech sponsored by the Yale Sustainable Food Project at SOM on Oct. 4. Dach, a 1975 Yale graduate, says that ever since Wal-Mart stepped in with large amounts of relief after Hurricane Katrina, the company has begun to focus on ways to become greener.
“The company then began to look at itself through that positive experience and say, ‘What other areas in which we operate can we make that kind of positive difference?’” he said. “It became clear that sustainability was a place where the company’s footprint and the way it did business could really make a difference. We understand that we have an opportunity to lead and because of the scrutiny that the company deservedly gets in the public as the world’s largest corporation, we also recognize we have a responsibility to lead.”
Dach, who has a long history in Democratic politics, the environmental movement, and public relations, recently joined Wal-Mart to help manage its public relations and lead its drive to increase the sustainability of its operations, which has three long-term goals: to produce zero waste at stores, to only use renewable energy, and to sell only sustainable products. The heart of Wal-Mart’s sustainability push, he said, is to cut its own costs by focusing on decreasing the amount of packaging in the shelves, while cutting the amount of energy the company consumes. Wal-Mart is in a unique position to drive businesses around the globe to adapt to its demands. For instance, Wal-Mart demanded that its trucks use auxiliary power to run generators when stopped rather than the old way of keeping the truck running through the night. That change, Dach said, can save 100,000 tons of CO2 per year and 10 million gallons of diesel fuel. Wal-Mart is also working with the industry to create hybrid trucks. “We’re such a large customer in the market we can drive change and drive the development of new products,” he said, noting that Wal-Mart works with 60,000 suppliers.
Making its trucking more efficient is one of numerous such projects. Dach said the company is experimenting on using solar panels on top of stores and will soon be one of the top-five commercial consumers of solar energy in the world. New experimental stores test ways to dramatically decrease energy use by dimming lights during the day or covering the outside in ceramic tile as a way to keep them cooler. Wal-Mart will soon no longer sell detergent that isn’t concentrated. This one step should save the company up to $30 million per year in transportation costs, he said. “People are saving money throughout the supply chain,” he said. “So the customer saves money.”
Saving money is the way Dach said the Wal-Mart customer can be brought into the idea of sustainability. The average Wal-Mart family earns $45,000 per year, he said, and will not pay more money for sustainable products or organic produce, a market the company recently entered. “The Wal-Mart customer doesn’t really care about the environment,” he said, explaining that they make decisions based on what they can afford. “Whether a store is green or sustainable is not important them.” But, he added, that’s not necessarily a bad thing since it forces Wal-Mart to create initiatives that don’t lose money for the company. The plan is for all its energy investments to pay for themselves within two years. He admitted the company has a long way to go before there are no Dumpsters outside Wal-Marts because stores no longer produce waste. And the Wal-Mart carbon footprint is still expanding, if more slowly now. But he said the company has made a good start. “Being a sustainable company has made us a better business,” he said. “It’s reduced costs, it’s given associates a prouder place to work, it’s deepened our relationships with our suppliers, and it’s made a difference in the world.”
Listen to Leslie Dach discuss the role of business in sustainability.