Image: Wal-Mart refrigeration
Carissa Ray / Msnbc.com
Some experiments in those prototype stores, such as refrigerated display cases that only light up when a person walks by, have shown immediate promise for wider use.
Alison
By Allison Linn Senior writer
msnbc.com
updated 4/19/2007 8:23:14 PM ET 2007-04-20T00:23:14

For years, Wal-Mart has been an easy target for people who fret about the environment. After all, it’s a major corporation whose massive stores take up acres of land and produce tons of waste, and whose products are trucked from store to store on a vast fleet of gas-guzzling vehicles.

Now the retailing giant is setting out not just to remake its image but also to improve its business.

The major environmental overhaul includes finding ways to make its thousands of trucks more efficient, building new stores with strict energy conservation goals and pushing its suppliers to reduce packaging.

On Wednesday the giant retailer launched an aggressive ad campaign touting its environmentally friendly products.

While Wal-Mart insists it sees inherent value in helping the environment, the famously bottom-line focused company also has found a more practical upside — the potential to save money by reducing waste, packaging and energy use.

“Things do not need an immediate payback, but they do need to be business strategies,” Andy Ruben, Wal-Mart’s vice president for corporate strategy and sustainability, said of the company’s environmental goals.

Wal-Mart’s shift, if successful, should mean more than just token moves. The company is so big, and the network of companies that supply its products so vast, that experts see the potential for Wal-Mart to have a tangible impact on problems such as greenhouse gas emissions.

“The promise of Wal-Mart is its huge market share and its incredible supply chain,” said Gwen Ruta, director of corporate partnerships for Environmental Defense, which has placed enough faith in Wal-Mart to open an office in the company’s hometown of Bentonville, Ark.

Still, Ruta, like many environmental advocates, is cautious about endorsing Wal-Mart wholeheartedly just yet.

“It’s too early to know if Wal-Mart’s gains will meet their aggressive goals,” she said.

Wal-Mart acknowledges that it is still in the early stages of its effort, but the company says its nearly 2-year-old commitment to helping save the environment — not to mention some money — is legitimate.

The broad goals are being addressed with a mixture of big, overarching changes and small, incremental ones.

For example, Wal-Mart has pledged to double the fuel efficiency of its fleet of vehicles by 2015, compared with 2005 levels — a move that should vastly reduce fuel expenses. Already, it has installed auxiliary power units in its trucks, so truckers can do things like run heaters while they sleep without running the truck’s main engine.

The company also has built two experimental stores devoted to testing environmentally friendly improvements. In one store, in Aurora, Colo., Wal-Mart used recycled concrete from an old airport runway for the store’s foundation and is reusing vegetable and motor oil to heat the store.

In addition, it has opened two high-efficiency stores that aim to use 20 percent less energy than its typical Supercenters and that could serve as a model for future stores. Wal-Mart’s overall goal is to make its existing stores 20 percent more efficient by 2012, as compared to 2005 levels. In that process that should lower energy costs substantially.

Some experiments in those prototype stores, such as refrigerated display cases that only light up when a person walks by, have shown immediate promise for wider use. Wal-Mart also was so impressed with an experiment to use more efficient LED lighting on the front of its stores that it immediately ordered all new stores to adopt the technology.

A broader effort to encourage more sustainable fishing also is beginning to result in lower prices for fish at its stores, Ruben said.

Wal-Mart also is starting to push its environmental goals on to its customers, arguing that there are cost savings to be had in purchasing things like compact fluorescent light bulbs, which cost more upfront but save money over their lifetime.

It also has begun encouraging companies that supply the products on its shelves to reduce packaging, which will both lower transport costs and reduce the amount of waste Wal-Mart must either dump or recycle. The company also may soon judge consumer electronics makers on things like energy efficiency and reductions in use of hazardous materials.

The experimental nature of its plans have inevitably led to some trial and error. At its experimental stores, an attempt to use wind power wasn’t as successful as hoped. Wal-Mart also wasn’t happy with its test of pervious pavement that can more easily absorb water in parking lots.

Still, Ruben is confident that the company will be able to find better options to address those areas as well. That’s partly because the company’s sheer market power should push suppliers to come up with better technology to address its needs.

Ruben said the company hasn’t been shy about sharing such advances with its competitors, on the theory that if more people adopt the technology, prices will go down and suppliers will become more competitive.

He also insists Wal-Mart is only at the beginning.

“We’re barely at the low-hanging fruit with the efficiency opportunities,” he said.

Ruta, of Environmental Defense, sees a lot of hope in that kind of talk. But no matter how much Wal-Mart improves its energy efficiency and other environmental impacts, she notes that there is one big drawback — the company continues to build big new stores, adding to its potential for environmental damage.

Ruben argues that Wal-Mart is looking at stores that can have less impact, such as multi-level buildings or those that are located in already-developed urban areas or malls.

“The image of a rural store that is basically a county seat is rapidly changing,” he said.

Still, the company also continues to construct stores on undeveloped plots of land in less dense areas, and some of those projects have been challenged on environmental grounds.

Critics also note that Wal-Mart has another pragmatic reason for pushing a bold environmental agenda — the potential to improve its image.

Wal-Mart’s reputation has been battered in recent years by sustained, organized attacks against how much it pays workers, its expansion plans and other business practices. Its share price is essentially flat as compared to two years ago.

“They’re riding a big, positive PR wave for their environmental initiatives. It’s probably the only positive coverage they’re received recently,” said Nu Wexler, spokesman for the anti-Wal-Mart group Wal-Mart Watch.

He thinks the company deserves legitimate credit for taking steps to cut waste and energy use, and he also doesn’t see anything wrong with Wal-Mart making environmental changes in part to save money.

Still, his group also is pushing the company to provide even more specifics about its goals, arguing that its current outlines are too vague. At this point, he said, he views the environmental initiative with “cautious optimism.”

Wal-Mart’s Ruben concedes that there will always be some skeptics. To them, he said, “Hold us accountable.”

“Don’t measure us on our commitments. Measure us on our actions,” he added.

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