Wal-Mart's Sustainability 360 approach: reducing waste and switching to sustainable technologies can save money and increase profits.
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Wal-Mart believes that being an efficient and profitable business can go hand-in-hand with being a good steward of the environment. Its mission hasn't changed: helping more than 176 million shoppers every week save money and live better. It does so by offering products that are high quality, affordable, ethically sourced, and environmentally friendly.
In 2005, in the wake of Hurricane Katrina, Wal-Mart executives realized the company could do more for the environment and the communities it serves. As such, Wal-Mart president and CEO Lee Scott announced three sustainability goals for the company: to be supplied by 100 percent renewable energy, to create zero waste, and to sell products that sustain the earth's resources and the environment.
Wal-Mart believes that being an efficient and profitable business can go hand-in-hand with being a good steward of the environment.
Sustainability 360 was created to help meet those goals. The new approach focuses a sustainable lens at the entire company: its customer base, supply chain, associates, and products.
The Sustainability 360 plan includes 13 sustainable value networks, each focusing on a specific area of business, such as buildings, food, packaging, and transportation. The networks are built to identify and develop meaningful changes and include voices of Wal-Mart's associates, environmental nongovernmental organizations (NGOs), suppliers, scholars, and government leaders. This collaborative method has helped Wal-Mart approach sustainability from a new angle, while finding value in places the company never imagined possible.
The sustainable value networks affect Wal-Mart's entire supply chain: they look at the company's global footprint and determine where waste can be reduced and efficiency increased.
The Packaging Network
One of Wal-Mart's thirteen sustainable values networks deals with packaging, an obvious component of every product-it draws attention, emphasizes the brand, and provides product information. The packaging network set a goal to reduce packaging in the Wal-Mart supply chain by 5 percent come 2013. Reaching that goal would prevent 660,000 tons of carbon dioxide from entering the atmosphere, a feat equal to taking roughly 200,000 trucks off the road every year. It would also save the company more than $3.4 billion.
Wal-Mart's suppliers are also catching on: after all, a reduction in their packaging can also save them money. General Mills is a leading example of the changes: straightening its Hamburger Helper noodles meant the product could lie flatter in the box. This, in turn, allowed General Mills to reduce the size of those boxes. The move saved nearly 900,000 pounds of paper fiber every year, reduced the company's greenhouse gas emissions by 11 percent, took 500 trucks off the road and increased the number of Hamburger Helper boxes on Wal-Mart shelves by 20 percent.
This collaborative method has helped Wal-Mart approach sustainability from a new angle, while finding value in places the company never imagined possible.
Packaging changes are also influencing Wal-Mart's supply decisions. A few years ago, the company partnered with Unilever to reduce the packaging of the latter's "all" laundry detergent. Shortly thereafter, Unilever unveiled "all small & mighty," a three-times concentrated detergent capable of washing as much laundry as a 100-oz. bottle of regular detergent. Other suppliers quickly followed suit. Come May 2008, Wal-Mart will only stock concentrated liquid laundry detergent on its shelves. Making this change will reduce water consumption by 400 million gallons and save more than 95 million pounds of plastic resin and 125 million pounds of cardboard a year. And thanks to Wal-Mart's large purchasing power, its competitors are also expected to make the switch.
Wal-Mart unveiled a packaging scorecard in 2008. It will help to evaluate the sustainability of its suppliers' packaging. The company's buyers will then use the scorecard to make more informed purchasing decisions.
Former president Bill Clinton recently announced a partnership with Wal-Mart and the Clinton Climate Initiative to bring environmentally friendly technologies to cities across the United States and around the world. Wal-Mart will also work with the United States Conference of Mayors to explore ways to use its collective purchasing power to lower prices on sustainable technologies such as energy-efficient building materials, high-efficiency lighting and clean-energy products, and help speed the development and deployment of these technologies into the market.
Wal-Mart's associates have been a driving force behind many of its sustainability efforts. In March 2007, Wal-Mart launched an associate-established program called the Personal Sustainability Project (PSP), which helps its associates integrate the principles of sustainability into their daily lives. The company is now on the receiving end of success stories from across the United States: associates are saving money on their electricity bills, eating more healthy foods, and suggesting other ways Wal-Mart could save money while saving the planet.
The Packaging Network
The packaging network set a goal to reduce packaging in the Wal-Mart supply chain by 5 percent come 2013.
Reaching that goal would prevent 660,000 tons of carbon dioxide from entering the atmosphere, a feat equal to taking roughly 200,000 trucks off the road every year
It would also save the company more than $3.4 billion
Corporate Social Responsibility;Finance;Supply Chain Management;