Feb 26, 2010

A Green and Sustainable Wal-Mart?? [POV]

Today, Wal-Mart made a groundbreaking announcement. They decided to involve over 100,000 of their suppliers in an initiative over an extended period of time and actually reduce their global carbon footprint. This will involve suppliers all over the world and this is as groundbreaking as sustainability gets – especially after what Wal-Mart did last month. The more important question to ask at this stage is if this move will spur companies to take up initiatives of the same order and scale. Of late, there has been a lot of talk about corporate sociaburning earthl responsibility and how to tie it into the way companies do business every day. This gave rise to the term sustainability.   The EPA has been especially vocal in publicizing the various benefits of having sustainability on the radar. And, with Copenhagen and the number of delegates we saw there, most businesses in America knew at the back of their mind that it was not long before they were forced to report their level of sustainability.

 

So, what has Wal-Mart actually promised in today's announcement? Let us take a look at the key takeaways from today's meeting.

 

  • Reduce 20 Million Metric tons of Greenhouse Gas Emissions from their Global Supply Chain.
  • Taking a transparent, efficient, measurable and accountable approach involving their suppliers.
  • Its going to involve a larger group – 100,000 suppliers all over the world
  • Its going to start a race amongst the suppliers to be greener and more efficient
  • Efficiency is the key term here
  • They want to show the world that they can decouple business growth from carbon growth

 

One interesting fact that I noticed at today's event, was that Wal-Mart openly talked about how much waste they have reduced and will continue to reduce from packaging material. It seemed interesting to know how 20th Century Fox's supply chain reduced packaging material in their DVDs and were able to save significant amounts of money in doing so. They even showed us a live example. What was even more interesting to note was that they had partnered with TreeHugger for this event. This only goes to show how much Bentonville wanted this to be a great success. The event took off with a lot of sweet talking directed to the suppliers. Given Wal-Mart's troubled past, it looks like they've now come to realize that they need suppliers' co-operation to make this initiative worth mentioning in the future.

 dewongrass

POV – [THE GOOD]: The goal Wal-Mart has set is lofty. By looking to reduce greenhouse gas emissions in the next five years to the rate of 1 1/2 times their projected emissions growth until 2015, Wal-Mart is showing unprecedented initiative. They seem to have gathered a strong pack to support them - including the Environmental Defense Fund, Price Waterhouse Coopers, the Carbon Disclosure Project and many more. Personally, I feel this step signifies a new direction for Wal-Mart. Simply by being the first to take up such a massive initiative, they are going to set the rules of the game. It  never ceases to surprise me how Wal-Mart keeps finding ways on increasing their profitability.

 

[THE BAD]: One pitfall they need to avoid going ahead is “public perception”. We have all seen the damage these protests can do to their image. Its all good that Wal-Mart is taking control of the situation for the greater good of society (which is how they’re marketing it. I am yet to buy it) and their own sustainability. But this measure is going to warrant drastic changes by the suppliers. Wal-Mart was the suppliers’ soothsayer today. However, knowing history, I wouldn’t be surprised to see suppliers complaining in the near future. This is what makes me apprehensive. Because this initiative of Wal-Mart should not fail. If it does, other companies will shy away from trying green ideas unless mandated.

 

This looks like a lot to swallow for Wal-Mart's suppliers too. Especially after they made significant changes  to their supply chain to eliminate delays in shipment. But it is in line with their overall strategy - and like it has always been: If you want to do business with Wal-Mart, you play by their rules. This new announcement might herald a new wave in CSR initiatives in the near future. But I'm betting that a lot of big companies will be waiting and watching - if the experiment is a success, it will trigger an avalanche.

Feb 26, 2010

A Green and Sustainable Wal-Mart?? [POV]

Today, Wal-Mart made a groundbreaking announcement. They decided to involve over 100,000 of their suppliers in an initiative over an extended period of time and actually reduce their global carbon footprint. This will involve suppliers all over the world and this is as groundbreaking as sustainability gets – especially after what Wal-Mart did last month. The more important question to ask at this stage is if this move will spur companies to take up initiatives of the same order and scale. Of late, there has been a lot of talk about corporate sociaburning earthl responsibility and how to tie it into the way companies do business every day. This gave rise to the term sustainability.   The EPA has been especially vocal in publicizing the various benefits of having sustainability on the radar. And, with Copenhagen and the number of delegates we saw there, most businesses in America knew at the back of their mind that it was not long before they were forced to report their level of sustainability.

 

So, what has Wal-Mart actually promised in today's announcement? Let us take a look at the key takeaways from today's meeting.

 

  • Reduce 20 Million Metric tons of Greenhouse Gas Emissions from their Global Supply Chain.
  • Taking a transparent, efficient, measurable and accountable approach involving their suppliers.
  • Its going to involve a larger group – 100,000 suppliers all over the world
  • Its going to start a race amongst the suppliers to be greener and more efficient
  • Efficiency is the key term here
  • They want to show the world that they can decouple business growth from carbon growth

 

One interesting fact that I noticed at today's event, was that Wal-Mart openly talked about how much waste they have reduced and will continue to reduce from packaging material. It seemed interesting to know how 20th Century Fox's supply chain reduced packaging material in their DVDs and were able to save significant amounts of money in doing so. They even showed us a live example. What was even more interesting to note was that they had partnered with TreeHugger for this event. This only goes to show how much Bentonville wanted this to be a great success. The event took off with a lot of sweet talking directed to the suppliers. Given Wal-Mart's troubled past, it looks like they've now come to realize that they need suppliers' co-operation to make this initiative worth mentioning in the future.

 dewongrass

POV – [THE GOOD]: The goal Wal-Mart has set is lofty. By looking to reduce greenhouse gas emissions in the next five years to the rate of 1 1/2 times their projected emissions growth until 2015, Wal-Mart is showing unprecedented initiative. They seem to have gathered a strong pack to support them - including the Environmental Defense Fund, Price Waterhouse Coopers, the Carbon Disclosure Project and many more. Personally, I feel this step signifies a new direction for Wal-Mart. Simply by being the first to take up such a massive initiative, they are going to set the rules of the game. It  never ceases to surprise me how Wal-Mart keeps finding ways on increasing their profitability.

 

[THE BAD]: One pitfall they need to avoid going ahead is “public perception”. We have all seen the damage these protests can do to their image. Its all good that Wal-Mart is taking control of the situation for the greater good of society (which is how they’re marketing it. I am yet to buy it) and their own sustainability. But this measure is going to warrant drastic changes by the suppliers. Wal-Mart was the suppliers’ soothsayer today. However, knowing history, I wouldn’t be surprised to see suppliers complaining in the near future. This is what makes me apprehensive. Because this initiative of Wal-Mart should not fail. If it does, other companies will shy away from trying green ideas unless mandated.

 

This looks like a lot to swallow for Wal-Mart's suppliers too. Especially after they made significant changes  to their supply chain to eliminate delays in shipment. But it is in line with their overall strategy - and like it has always been: If you want to do business with Wal-Mart, you play by their rules. This new announcement might herald a new wave in CSR initiatives in the near future. But I'm betting that a lot of big companies will be waiting and watching - if the experiment is a success, it will trigger an avalanche.