Walmart: A Role Model for Corporate Climate Change Efforts?

Walmart is amongst the companies leading climate change efforts. This is amidst recent federal policies which stymie government regulation of climate change and energy (in addition to USA’s withdrawal from the Paris Climate Change Agreement). How and why did this trend emerge, and what does Walmart stand to gain?

Approach

In 2005, Walmart CEO Lee Scott announced the company’s aim to produce zero waste and shift to renewable energy. These demanding goals entailed a massive change in multiple aspects of the company’s operations, which would include changing its supply chain and business operations to be more energy efficient.

Walmart would also have to begin producing more sustainable products. The announcement came in the wake of Walmart’s much-lauded contributions to Hurricane Katrina victims. Through its innovative and impactful solutions to the natural disaster and support of the local community, Walmart positioned itself as an example of corporate social responsibility.

Many analysts and climate change activists, however, have labeled Walmart’s efforts a publicity stunt. While accounting for environmental pollution, Walmart excludes emissions from electricity & utilities, domestic and international shipping, land development and construction, not to mention increased driving by consumers and the production of store-brand products.

Given Walmart’s size and net spending, their allocations to climate change efforts seem like a fraction of the pie. Walmart has also been under attack for its history of financing climate change deniers.

Payoffs

The ever-growing, frequently merging corporate behemoths have many a motivation to adopt sustainable practices. The market has seen an increased demand for ‘green’ products, and environmentally conscious customers further urge climate change efforts. Physical drivers such as workforce attendance, weather conditions, and raw material supply also prompt such a shift.

This is in addition to regulatory changes such as carbon management and fuel price volatility. Research shows that such key shifts in production dependencies promise great profits for companies. Companies have been posted to save an average of $366 billion (per year) fuel costs.

Bottom Line

While there is much debate over the motives behind Walmart’s operational overhaul, one cannot argue that it can only benefit the planet, and hopefully, serve as an example for the rest of the industry.

By Rekha Vegesna