CEO H. Lee Scott Jr. offers a realistic assessment of his company’s sustainability efforts
“We are not green.”
Those words were spoken by Wal-Mart CEO H. Lee Scott Jr. during his panel at the conference. Hours later, they headlined a post on the WSJ energy blog. Hours after that, they served as the subject of a broadside from the company’s sworn enemy, Wal-Mart Watch.
Here’s the exact quote, as I transcribed it in my notes (100 percent accuracy not guaranteed):
It has been positive from a PR standpoint, but one of the things we learned is that we are not sophisticated enough to spin a story — ultimately, we’d get hammered. We are not out saying we’re a green company. We are not green. We have an extraordinary distance to go.
In context, it’s clear what Scott was saying. While Wal-Mart’s made all kinds of efforts to lighten its footprint, nobody would characterize it as “green,” i.e., as having finished the job. And, stepping back even further: Wal-Mart is a retailer, plain and simple, not a company devoted to saving the world. For the company, sustainability issues are largely about eliminating waste and reducing costs — it’s a business strategy, not (primarily) an environmental strategy.
I found this to be a fairly refreshing lack of BS. It’s a little irritating to see it used as a gotcha.
Another bit I found gratifyingly frank was when Scott was asked when the company would reach its ambitious goals of zero waste and 100 percent renewable energy. Said Scott: “Oh, I don’t know. I have no idea when that will be.” Instead of hard targets, he said, it’s meant to be a statement: it’s possible. “Let’s go for it.”
What I wanted to lay out were not just incremental goals but aspirational goals. The technology does not exist today to allow Wal-Mart or any company to achieve such goals in total. But we want people to understand that this is the direction this company is going.
You might say that without a target date the company won’t force the changes needed, but the whole point is that they don’t have to be forced. The company and its suppliers have found that the changes are good for business. Pursuing the targets will be good for business. To Scott — contra (many) enviros on one side and conservatives on the other — there is no contradiction. Eliminating waste is saving money. Shifting to renewable energy will, over time, save money. (He asked, “Does anyone think electricity prices are going down in the next five years?”) It’s not castor oil.
[Obligatory disclaimer about Wal-Mart’s awful labor practices.]
Here are a few more things from the session I found interesting:
- At the beginning the moderator asked people to indicate (via their handheld interactive widgets) whether they’d been to Wal-Mart in the last month. 70 percent said no. These are not, suffice to say, Wal-Mart shoppers.
- Scott said that when he started out, the company viewed environmental NGOs with some suspicion, even hostility. But as things progressed they found NGOs a crucial and important partner (though they had to promise the NGOs that came to Bentonville not to disclose their names!). It seemed to me that Scott bent over backwards to give credit and respect to the NGOs that have helped the company. Given that virtually no NGOs were present at this conference — and that most conference attendees were likely to be somewhat hostile toward NGOs — this seemed notable.
- Asked if customers would pay more for sustainable items, Scott noted that 20 percent of Wal-Mart customers don’t even have a checking account. “They just can’t afford to pay more.”
- At the beginning he did not appreciate the communications challenges. They’ve been successful at communicating with suppliers and associates, but communicating about this stuff to customers is quite tricky — they are “struggling with the in-store, point-of-sale signage.” It turns out that even the most green-seeming products are more complicated than you think at first glance — and greenwashing on the floor of their stores would do them more harm than good. This is going to be a focus going forward: trying to speak more to customers about sustainability issues.
- Zoning issues and relentless campaigning by NGOs has made land-use a priority issue. The company is focusing now on brownfields and other more benign siting decisions. (Color me skeptical about this, but I was glad someone at least asked about land-use issues.)
Here’s a bit from Scott’s session (a bit which — shocker — outraged Wal-Mart Watch):