Green Speak From Wal-Mart
Throughout the retail industry and beyond, Walmart has earned a reputation as a leader in executing sustainable improvements that deliver positive results for consumers, communities and the company’s bottom line. Andrea Thomas, who joined Walmart in 2007, was appointed the company’s first senior VP sustainability in August 2010. Thomas talked with Chain Store Age contributing editor Connie Gentry about what sustainability means at Walmart and how the company leverages its scale to make the biggest possible impact for global good.
Sustainability leadership is an emerging position in many retail organizations. Will you please explain your role at Walmart?
The sustainability role at Walmart is interesting because it is a rotating responsibility. Walmart taps someone from another business area to lead sustainability, with the intention that after two or three years that person will move elsewhere in the company and another Walmart executive will assume the sustainability role. Although it’s not a career destination, it’s a very interesting job. There is interaction internally across virtually all departments, and an equal amount of interaction externally with communities, government agencies, NGOs [non-governmental organizations, typically associated with the United Nations] and other entities. Getting to know all the people who are coming together to work on sustainability is fascinating. Next month it will be two years since I began this rotation, and I expect to spend at least one to two more years in this role because there is a lot of work that still needs to happen.
Tell us about your background and how it helped to lead sustainability.
Before joining Walmart, I spent 13 years at Pepsico and a couple of years at Hershey. So I dealt with Walmart and other retailers from the manufacturing side. In my early years at Pepsico, I worked in the restaurant division; and while that’s not retail per se, it involved working with many store locations and it had a lot of the same flavor to it as a retail organization.
Initially I came to Walmart to work with private brands, food and consumables, then I moved into sourcing general merchandise. For sustainability, it is very helpful to have an understanding of store operations, logistics and our supply chain. About 90% of our carbon footprint comes through our supply chain.
I’ve spent most of my career working with innovations on the CPG side, balancing new products and understanding all the pieces of the supply chain. With all the products in our stores, it’s very important to understand where products come from and identify opportunities to do things more efficiently and more environmentally pointed.
How is sustainability integrated into the Walmart culture?
Walmart is all about lowering costs so we can lower prices, attract additional traffic and build customer loyalty. When you think about the principals of sustainability, the emphasis is on doing more with less, being more efficient, and using fewer natural resources. For a retailer, this is particularly true as you think about how to develop stores and supply chains. In those respects, sustainability is very supportive of the Walmart productivity loop. From the very beginning, our priority was to help every department and associate understand the principals of sustainability, how sustainability supports the company’s productivity loop, and that sustainability needs to be embraced throughout the organization.
In addition to my team of 14 people, there are others who don’t report directly to me but, within their department, their job is to support our sustainability efforts. We also created Sustainable Value Networks throughout the company so people working in various jobs have the opportunity to think about how we should address sustainable opportunities within the business.
What are some of the things your sustainability team is responsible for?
The team supports and liaises with the external resources and expertise that reside outside the company, including the NGOs, and with internal associates who focus on sustainability. We develop scorecards, lead discussions that need to take place to address sustainability issues, and conduct milestone meetings to communicate what Walmart is doing.
How do you define sustainability at Walmart?
Before we talk about sustainability, you have to step back and look at our company mission: Saving people money so they can live better. Sustainability is one aspect of how to live better, but it’s not the only part. In my role, I also work on Walmart’s healthy foods initiative and I partner closely with our Walmart Foundation to promote women’s economic empowerment and community programs around hunger. These initiatives all come together to help achieve the “living better” goal and Walmart certainly has a broader definition of sustainability than a lot of companies; but frankly we don’t get caught up in the semantics.
Under the sustainability umbrella, we look at anything to do with the environment, communities, and economic sustainability that will help us continue to serve our customers well into the future. We maintain a broad definition because it is more about how we can make a broad impact than how we fit into a very specific definition.
Across such a broad spectrum, how do you prioritize where to focus sustainability efforts?
Our visionary goals were set in the 21st Century Leadership speech that Lee Scott, then CEO, gave in October 2005, and include three main aspirational goals around waste, energy and products. One is to be supplied by100% renewable energy, to create zero waste, and the third is to have products that sustain people and the environment. Those are big, broad and far-reaching, but it’s easy to categorize what fits under each goal and identify ways that the business touches each aspect. For instance, waste falls under operations and transportation supports product getting to the stores which is a big energy piece.
On the product side we have projects around sustainable agriculture and the Sustainability Index. We’ve set goals around agriculture because it touches so many areas of our business. Food, obviously, but also the cotton used in apparel and home products or wood that goes into furnishings and hardlines. The Sustainability Index helps us understand the supply chain and recognize areas we need to start working on and thinking about. Some goals are to educate us, so we can experiment and learn ways to be more energy efficient in our stores.
Other goals are broad and have a lot of scale, such as creating zero waste which is one area where we have already made excellent progress. In our U.S. operations, we have diverted 80% of waste away from landfills. Some of our goals are global or may focus on a particular region. For example, within sustainable agriculture we have specific goals about product sourced from Brazil and we also have a global goal for using sustainable palm oil in our private brands. We can’t do everything everywhere, so we try to focus on the things that are uniquely connected either to our business or where we do business.
What did you do to achieve diverting 80% of the company’s waste out of landfills?
First we encouraged our people to focus on waste reduction and understand its importance. In the past, each store paid to have its waste hauled to the landfill. We highlighted the fact that there is value to the waste and we helped our store teams develop recycling programs with their communities and identify other places for that waste to go – so waste disposal changed from being an expense to a profit center in the stores. And most of our stores now have what we call a Super Sandwich Baler, which stacks and crushes the recyclable waste so it can be easily picked up and transported.
We also started using recycled material across our supply chain and we convinced vendors to use recycled materials as well. We always look for ways to connect the waste stream to actual products that we sell or use within our operations, and we have several closed-loop examples. For instance, we send the cardboard cases that market-size pizza comes in to the company that makes our pizza boxes so it can be recycled into another use.
In another example, we’re focusing on ways to avoid wasting perishable items. The Walmart Foundation donated refrigerated trucks that now deliver fresh items that are still edible but can’t be sold to organizations that feed the hungry.
What about the remaining 20% of waste that isn’t being recycled or reused?
A portion of that remaining 20% is there because some stores are in communities that don’t have as many abilities to recycle. And then there is the waste that customers bring into the store. We are still trying to determine whether we should sort that waste or not. It just doesn’t make sense at this point to send associates into the restrooms to separate waste in trash cans. But it does make sense for us to have associates in the produce section who can sort the damaged produce that we won’t sell and send it to animal feed. That’s proved to be a good idea and we’re doing.
Walmart also promotes renewable energy usage, including your 100th solar installation in the U.S., as well as installations in Canada and China. What is the outlook for renewable energy?
Solar and wind are two sources of renewable energy that can provide micro-sources of energy. They are easily implemented on either a large scale or a small scale. We have wind farms in Mexico that are running 350 stores and then we have single stores with windmills in the parking lot that generate energy for that one location. The same applies to solar – our stores have big rooftops that allow us to easily install solar panels. Solar technology changes all the time and we’re starting to see solutions that provide benefit in a concentrated space, so we are exploring how to expand the “small” solar and we’re experimenting with renewable energy sources, like fuel cells.
However, renewable energy has to reach a point that it doesn’t cost more than non-renewable energy. The scale that Walmart brings, and our ability to partner with others to find funding, lets us play a role to help bring renewable energy to the place that it is cost neutral.
Are there sustainability initiatives that create cost but are still worth doing?
Maybe – we have to look at the longer term benefit and at our ability to commercialize it. We will absolutely invest in learning; but if it’s too difficult to scale a sustainable project or if the capital investment doesn’t pay off for us, then we probably won’t continue with it.
Of all the sustainable milestones Walmart has achieved, what do you think is most notable?
That’s a hard one. Sustainability is not about one single accomplishment. For us, the most notable aspect is the ability to get all parts of the business working on sustainability, thinking about it, and talking about it. That comes from both top-down leadership and a bottom-up passion. We have 2.2 million associates and it’s really exciting that we’ve been able to get them involved in understanding sustainability and serving our customers in a more sustainable way. At Walmart, we have a unique opportunity to make an impact on a global scale as we learn and focus on sustainable areas.
It certainly sounds like you are leading the sustainability group with a lot of personal passion.
Absolutely! Once you understand sustainability, and the more you learn about it, you can’t turn that part of your brain off. Wherever I go, I’m constantly thinking about where a product is made, all the places it touches and how things can be done better, in a way that makes sense. I see tremendous opportunity and impact from the work we are doing with the Sustainability Consortium, which is all about working together as an industry. By making some small changes as an industry, but doing it with the kind of scale that a large retailer can bring, it’s amazing to think what can happen.
In places like Africa, I’ve seen the impact we have on families and communities when we buy things from small, local farmers. Ultimately, it’s about our role as a citizen in the communities where we trade, and that’s the most powerful aspect of sustainability.
To learn more about sustainability at Walmart, check out the company’s blog: Walmartgreenroom.com.