11 November 2008

Conference Call w/ Wal-Mart's Senior Dir. of Sustainability

While visiting Patagonia an interesting discussion came up regarding Patagonia working with Wal-Mart in helping to further develop its corporate sustainability efforts. This reminded me of a conference call I was able to listen in on with the Senior Director of Corporate Strategy and Sustainability at Wal-Mart. From these discussions I figured it would be best of me to share my cliff notes with everyone. This call was free and set up through Net Impact (I believe the recording is on the Net Impact web site). Regardless of what each of us may think of Wal-Mart as a company, I’m sure many of us know that to have them buy fully into CSR would be a huge push for both worker and environmental rights.

The call lasted about 1 hour and there was some time for questions at the end. It was very informative and well worth the time on a Friday morning. I strongly encourage others to listen in on these calls as well (I believe there is one with Sierra Nevada Brewing Company in a few weeks).

-Tony Laurino


Marc Gunther, Senior Writer at Fortune Magazine interviewed Rand Waddoups, Senior Director of Corporate Strategy and Sustainability at Wal-Mart Stores, Inc. As part of a small team dedicated to building sustainability into every part of Wal-Mart's global business strategy and culture. Rand is helping drive progress by delivering on 3 goals:
to have zero waste
to use 100% renewable energy
to bring sustainable product to their customers


8 years with Wal-Mart
Started as a buyer in Merchandising for a number of years at Wal-Mart first
Was tapped b/c he knew the supply chain better so he could better apply sustainability into this area.
Been doing this for 2 years now
MBA from the Univ. of Arkansas

Working on:

Oct 22nd: Meeting in Beijing w/ 1,000 suppliers on responsible sourcing
Sharing the future of sustainability at Wal-Mart w/ this group
Message: environment matters, lays out expectations they have going forward

Waste initiatives:
working toward zero waste
new ways to access recyclables
new ideas to work w/ organizations on combusting and/or use products that will be compostable
TLE- tire-lube express- getting very excited over finding ways to make them zero waste
oil bottle shredders (not recyclable), tiers, oil filter, air filters, used oil, worked w/ organizations in creating pilot stores so that only thing left going into the trash is pieces that can't be thrown away after vacuuming out the customers car.

Working w/ local and national partners to create a composting effort.
America's Second Harvest- started a partnership of giving almost out of date food products that couldn't be sold to customers but was still consumable (standard industry practice)

Biggest Frustrations:

Win you set goals and can't always measure them as you expect when future comes to reality
Hard to measure what you've done w/ sustainability
This has to be decentralized, hard to develop a centralized system to measure all of this
making it owned by the business leaders

Future Excitements:

Both business and environment impact

P&L of Trash in 2006 would have been a huge expense
now in 2007 TRASH became an INCOME source!
Wal-Mart Makes money on its trash (10's of millions of dollars on this)

Hardest part of composting is the transportation. Highest cost factor for this.

Now is the BEST time to apply sustainability.

This remains in line w/ the everyday low price philosophy.

Easy for the company to grab onto this 3 yrs ago b/c it fit perfectly in w/ the company culture.

Wal-Mart worked to create transparency of their supply-chain.

Philosophy for capital expenditure:

If coming up w/ ideas for sustainability and not in line w/ the financials then the job is to go back to the drawing board and figure out a smarter way of doing it.

Sustainability isn't about Wal-Mart alone everything they learn they share, Wal-Mart wants to move the market place and not go it alone.

Example is solar panels in certain test stores...need to go back and find cheaper and easier ways to actually do this.

Want to be the pioneer in the places where they should be and can do it right. Other ways want to help the market to create it and then ride along w/ it.

Close to 21 stores are fully installed w/ solar panels. And obtain up to 1 megawatt power out of them which is A LOT!

Where is the packaging area at? :

Some areas Wal-Mart has worked with manufacturers to reduce packaging are:

Square milk cartons in all Sam's Clubs currently.
Works well w/ high distribution there
Packing for lamp shade and lamp bases
Tricycles-no longer sold in boxes, folds in half now becomes compact able and is able to be transported.

Future of CSR at Wal-Mart:

½ million associates in the US have embraced sustainability and have committed to personal sustainability projects (include stopping smoking, health related, riding bike to work, eating organic, working to reduce carbon footprints by 25%, cleaning up wetlands)

How do the buyers accept PSP's that go against the product they are working with? :

Learning that not all buyers should be growing profits
realizing that some buyers need to think creatively about making product better
Coming up w/ ways to make money but improve the environment aspect (not becoming victims out of this)

No business is 100% sustainable. More sustainable Wal-Mart is the highest quality goods w/ the most efficient process used to maintain price advantage and be part of the community that allows the store to be the right place to shop.

Group initially was created out of strategy but wear a lot of hats b/c touch on every role in the company.

Advertising isn't about how great Wal-Mart is doing but rather what YOU the customer can do to be more sustainable!

***The recorded message of the call is also on the Net Impact website/blog for all members to listen too. I strongly encourage it (it’s about 1 hour), regardless of your feelings in regards to Wal-Mart as a company it was very informative to hear how a major company is working to embrace many of the things that we find so important and how their involvement can and will radically change the marketplace for CSR. ***

1 comment:

Pepperdine Net Impact said...

Thanks Tony! Sounds like it was a very interesting call. The group of us who attended the conference this past weekend also heard from Wal-Mart's Matt Kistler, Senior VP of Sustainability. He also mentioned Wal-Mart's 3 goals, but never mentioned a timeline or benchmarks for these ambitious goals. While they sound impressive, I'd be more interested in hearing more measurable goals and realistic timeframes. And while they steps they are currently taken are great in terms of showing other companies the cost benefits of sustainable business practices, Wal-Mart has yet to address the labor issues that have tarnished its reputation to date. It will definitely be interesting watching its transformation and progress though.