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Wal-Mart's Environmental Game-Changer
Harvard Business Publishing ^ | Thursday July 16, 2009 | Rosabeth Moss Kanter

Posted on 07/16/2009 11:57:05 PM PDT by Einigkeit_Recht_Freiheit

Wal-Mart has just changed the game with respect to environmental issues. Now it doesn't matter whether Congress' new cap-and-trade law meets all its promises, nor whether the G-8 leaders dithered rather than acted on environmental issues.

Wal-Mart's unilateral decision to put its purchasing and communication power behind going green also shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change. By rolling out an environmental labelling program disclosing to consumers the environmental costs of making products sold at Wal-Mart, the $401 billion retail behemoth has transformed green standards from nice-to-have to must-have.

Say au revoir, adios, auf Weidersehen, zai jain, and rest-in-peace to environmental skeptics and laggards; they are soon to be out of the picture. And it did not take legislation to neutralize them. It took a principled action by a self-interested company. That is values-based capitalism at its best.

This is one small step for Wal-Mart and one giant leap for Planet Earth. It is also one enormous demand on suppliers, among them many small companies that will feel crushed by the giant's new non-carbon footprint. But though Wal-Mart spent $200 billion buying from 56,000 U.S. suppliers in 2007, a high proportion of Wal-Mart's total annual purchases emanate from China where it's high time environmental standards are raised.

The beauty of the Wal-Mart innovation is that it doesn't ask anyone to change anything except the information that is provided and received. If polluters want to keep polluting, they are free to do so as long as they provide that data on their Wal-Mart labels. And if consumers choose to buy from polluters whose labels they can read, they are free to do so. In theory.

In practice, of course, we know that suppliers will change their practices to avoid embarrassing disclosures, and consumers will think twice about the choices they make. Consumer activists have been clamoring for information. At a recent conference discussing the company of the future, many seemingly informed people were astonished to learn how many gallons of water it took to make just one cup of Starbucks (or anyone's) take-out coffee - they had forgotten irrigation of coffee plants, fluids consumed by transportation of coffee and manufacturing of paper cups, and so forth.

We also know that the Wal-Mart concept is certain to be emulated by other retailers in their own ways. Who could possibly hold themselves up as Not-Green when over 130 million people visit a Wal-Mart store every week, according to company figures, and are made more conscious of environmental concerns? You can bet that a competition will ensue among retailers to out-do Wal-Mart in having the best green-oriented program. That might make "cheapest" the battle of the past and redefine "value" in the minds of consumers and the public.

Wal-Mart is not the first company to go green, nor even the first to reach deeply into its supply chain to require that suppliers meet particular standards. But it is the biggest, the most visible, and the least likely, given its past reputation. Its transformational action turns Wal-Mart into what I call a "SuperCorp" - a vanguard company that uses its power to improve an outcome for society, while knowing that its innovations will create profits as well as social benefits. In my new book, SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good (to be published in August by Crown), I identify a number of companies ahead of the pack in innovating for the good of society and raising standards, often in collaboration with public officials, while still keeping an eye on the bottom line, including Procter & Gamble, IBM, Cemex, and Cisco.

Wal-Mart had been the company that the left loved to hate, because it seemed to have too much power and to use it in non socially constructive ways, squeezing suppliers or keeping wages down. Today Wal-Mart reminds us that a new kind of capitalism is possible in which big companies can use their power constructively, for the good of society and to move on issues that are still largely unaddressed by government. Clearly self-interest still prevails; Wal-Mart would not be taken the labelling action, with all of its complications, if its decision-makers did not see a definite commercial market benefit.

We should applaud Wal-Mart for joining the vanguard and leading a new parade. First for the green program and all that might follow from it. Second for showing that a new model of principled, not just greedy, American capitalism can take shape.


TOPICS: Business/Economy; Extended News; Front Page News; News/Current Events
KEYWORDS: boycott; business; climatechange; environment; madeinchina; retail; walmart
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To: Red Boots
Does this author bring up changes in technology that push more companies to "Go Green" or claim they are going "Green"?

With more products being made that are IP based, new construction gets tons of tax incentives to utilize connected building products including IP lighting, IP HVAC, IP Security, IP door strikes etc. LEEDs certification helps out initial costs and give the company some damn good press.

In the long run, it keeps the construction costs high, but the ROI is solid. It also does not hurt they they can now get away from proprietary products and companies that they must use their software.

21 posted on 07/17/2009 5:55:48 AM PDT by tndarlin
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To: Einigkeit_Recht_Freiheit

Watch for rising prices.


22 posted on 07/17/2009 6:20:18 AM PDT by youthphil
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To: nathanbedford
the America I grew up in will be gone forever.

It's already gone my friend. It's all over but the shouting.

23 posted on 07/17/2009 6:23:21 AM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: Einigkeit_Recht_Freiheit

vomit

have they stopped cows from having flatulance yet?


24 posted on 07/17/2009 6:46:24 AM PDT by Dubya-M-DeesWent2SyriaStupid!
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To: Einigkeit_Recht_Freiheit
Anyone know if Target's doing something similar?

If not, guess where we'll be shopping....

25 posted on 07/17/2009 6:48:50 AM PDT by mewzilla (In politics the middle way is none at all. John Adams)
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To: Einigkeit_Recht_Freiheit

Dear Wal-Mart,
You just lost a customer.
Sincerely.


26 posted on 07/17/2009 7:08:24 AM PDT by Excellence (Meet your new mother-in-law, the United States Government)
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To: Einigkeit_Recht_Freiheit

“In practice, of course, we know that suppliers will change their practices to avoid embarrassing disclosures, and consumers will think twice about the choices they make.”

really? we know that? I expect suppliers will see what consumers choose before making any changes at all, and I expect most wall mart shoppers to continue to buy the cheapest products regardless of labeling. In effect, business as usual. People are all for protecting the environment as long as they personally don’t have to pay for it.


27 posted on 07/17/2009 8:26:51 AM PDT by monday
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To: LibLieSlayer; youthphil; mewzilla; Excellence
see #27. I wouldn't assume business at Wall Mart will change as much as the author assumes, maybe not at all. If anything it's just another clever marketing ploy by wal mart.

One other point. Wal mart isn't forcing it's suppliers to “go green”. They are just allowing customers the chance to pay more for “green” products if that is what they want to do. I doubt wal mart customers want to do that, but if a few do, who cares? Let people waste their money if it makes them happy.

28 posted on 07/17/2009 8:43:52 AM PDT by monday
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To: Einigkeit_Recht_Freiheit

[[Wal-Mart’s unilateral decision to put its purchasing and communication power behind going green also shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change.]]

BS- climate change is a NATURAL CYCLICAL EVENT which we can do absolutely nothign about- but let’s not let the FACTS get in the way of corporate greed and Walmart cashing in on people’s misguided- ignorant sense of self-loathing, their sense that they must ‘do something’ to ‘correct hte sins of we evil human beings’!

What a crock of Crap!


29 posted on 07/17/2009 9:19:00 AM PDT by CottShop (Scientific belief does not constitute scientific evidence, nor does it convey scientific knowledge)
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To: eclecticEel
Here, let me translate this for you edification...

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Praesent porta congue vulputate. Fusce auctor, ante sit amet adipiscing fringilla, urna tortor semper lectus, at malesuada diam purus ac erat. Nam dolor dui, porttitor at rhoncus vel, dictum in nunc. Pellentesque eget tristique lacus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Praesent eget turpis odio, eu auctor arcu. Vivamus blandit quam vitae risus hendrerit venenatis. Sed non orci nec mauris semper ultricies quis at risus. Proin in facilisis enim. Duis tempus orci et ante ullamcorper pharetra. Maecenas eu erat sed elit accumsan pellentesque in quis quam. Sed tincidunt neque a eros scelerisque dignissim. Suspendisse eu eros ac orci luctus commodo ac quis risus. Vestibulum ante ipsum primis in faucibus orci luctus et ultrices posuere cubilia Curae; Aliquam libero turpis, sodales ultricies vulputate eget, lobortis dignissim elit.



IOW, it's bs. It changes NOTHING!

They said including a warning from the Surgeon General would cause folks to stop smoking. They said printing warnings on plastic would stop children from playing with it. They said listing the fat content and calories on food stuffs would be a "game changer", and we'd all eat healthier, and get really skinny, too!

A REAL "game changer" would be for Wal-Mart to REQUIRE it's suppliers to produce products that meet just our current standards on Environmental safety...but they don't, and they won't!

Why? because Consumers don't give darn about it, they just want what they want, and they want it cheap.


30 posted on 07/17/2009 10:06:27 AM PDT by papasmurf (RnVjayB5b3UsIDBiYW1hLCB5b3UgcGllY2Ugb2Ygc2hpdCBjb3dhcmQh)
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To: Einigkeit_Recht_Freiheit

Greenies are so gullible. All WM is doing is making their suppliers put some silly lies on their labels. Nobody really knows what the environmental impact of their product is, there are too many variables, mostly in their employees and transportation. Just look at the argument over whether a Prius causes more damage than a Hummer, everybody has a pet stat on that, nobody really knows. Companies will use the most favorable assumptions, ignore everything they can get away with, and these new sections on their labels will be a bigger fiction than a Dan Brown novel. But the greenies will be happy and WM is getting good press. It’s a smart move, but not for any of the reasons in this article.


31 posted on 07/17/2009 10:14:20 AM PDT by discostu (Jeff's imagination has gone beyond the fringe of audience comprehension)
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To: Einigkeit_Recht_Freiheit

I am fighting both the premise the Cap and Trade is even needed (because of the globaloney spewing from the mouth of the liar Algore)....and the EFFECTS its measures will have on the economy.


32 posted on 07/17/2009 4:47:11 PM PDT by Freedom'sWorthIt
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